QUESTION 14 The optimal amount of x1. x2. P1. P2 and are given by the 41 6P 2 1

Question

QUESTION 14 The optimal amount of x1. x2. P1. P2 and are given by the 41 6P 2 1 The The original income is: The new price of P1 is the following: P1'-55 Assume that the price of x1 has changed from P1 to P1. What is the total change in the quantity consumed of x1? original prices are: P1-17 P2=27 1,678 QUESTION 15 (hint use only positive numt Assume that MPK-109 and that the slope of the lsoquant is equal to -70. What is MPL? QUESTION 16 Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Explanation / Answer

Demand functions are given at x1 = 4I/6P1 and x2 = 2I/6P2.

When price is P1 = 17 and I = 1678, quantity demanded for x1 = 4*1678/6*17 = 65.8

When price is P1' = 55 and I = 1678, quantity demanded for x1 = 4*1678/6*55 = 20.34

Hence total change in quantity demanded for x1 is 65.80-20.34 = 45.46 units

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