Lahore School of Economics



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Quiz 2- Version1 (1)
only X is normal.

The income-consumption curve for Dana between Qa and Qb is given as: Qa=Qb. His budget constraint is given as:

120 = Qa + 4Qb

How much Qa will Dana consume to maximize utility?


  1. 0

  2. 24

  3. 30

  4. 60

  5. More information is needed to answer this question.

A consumer's original utility maximizing market basket of goods is shown in Figure 4.1 as point A. Following a price change, the consumer's utility maximizing market basket changes is at point B.

Refer to Figure 4.1. The substitution effect of the price change in food on the quantity of food purchased is:


  1. the change from F3 to F1.


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