In periods 0 and 1, Ralph consumed two goods, x₁and x₂, and his utility functions in the two periods were identical. In period 0 the prices of x₁and x₂were $2 and $1 respectively, and Ralph consumed 10 units of x₁and 80 units of x₂. In period 1 the prices of x₁and x₂were identical, and equal to $1. If Ralph consumed 15 units of x₁and 65 units of x₂in period 1, then: A)he may have been equally well off in both periods. B)we cannot say whether he was better off in one of the periods. C)he was better off in period 1. D)he was better off in period 0.

Question

Quizplus · Accepted Answer

The Answer of In periods 0 and 1, Ralph consumed two goods, x₁and x₂, and his utility functions in the two periods were identical. In period 0 the prices of x₁and x₂were $2 and $1 respectively, and Ralph consumed 10 units of x₁and 80 units of x₂. In period 1 the prices of x₁and x₂were identical, and equal to $1. If Ralph consumed 15 units of x₁and 65 units of x₂in period 1, then: A)he may have been equally well off in both periods. B)we cannot say whether he was better off in one of the periods. C)he was better off in period 1. D)he was better off in period 0.

In Periods 0 and 1, Ralph Consumed Two Goods, X1

In Periods 0 and 1, Ralph Consumed Two Goods, X₁