Compare the cost of baskets

Reference no: EM132385653

Problem - You observe a lady in the Delhi market buys as follow:

Basket	Price			"Y" Income	Quantity
Basket	P1	P2	P3	"Y" Income	Q1	Q2	Q3
1	1	1	1	20	10	5	5
2	3	1	1	20	3	5	6
3	1	2	2	25	13	3	3

1) Is this consistent with utility maximization? How? For each basket, compare the cost of that basket vs. the cost of the other 2 baskets in total.

2) Name the baskets in terms of performance or utility for this consumer.

Note - This is an easy problem doable on excel or similar. Clearly show all steps.

Reference no: EM132385653

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