According to the following graph,if U₂ is the maximum attainable utility,the price of X is The price of Y is $50. A)$10. B)$15. C)$20. D)$25. E)none of the above

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Quizplus · Accepted Answer

The point of maximum attainable utility is where the budget constraint is tangent to the highest possible indifference curve. In this case, that point is at U1B12. The slope of the budget constraint at that point is equal to the slope of the indifference curve, which is -Px/Py. Therefore, -11/50 = -Px/50, which gives Px = $22. Plugging this into the budget constraint equation, we get 22X + 50Y = 1100. Solving for X, we get X = 20. So the best choice is to buy 20 units of X and 10 units of Y, which yields a utility of U1B12. The other options result in lower levels of utility.

According to the Following Graph,if U2 Is the Maximum Attainable

According to the Following Graph,if U₂ Is the Maximum Attainable