Write down the budget line

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Adam has $38 and he decides to spend on X1 and X2. Commodity one costs $5 per unit and commodity two costs $11 per unit. His utility function is U(X1,X2)= min(3X1,X2) .

a. Write down the budget line.

b. Draw his indifference map (Two sample indifference curves are enough) and his budget line. Show the optimal point. (Carefully label all axes with correct numbers and letters)

c. What is the optimal choice of X1 and X2?

Reference no: EM131162978

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