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UI Post-UTME Economics 2022 (Model questions) Question 1

Question 1

Theory of Consumer Behaviour

Given the price of commodity y is N2 and that of x is N1while the individual has income of N12. Determine the combination of the two commodities the individual should consume to maximize his utility

  1. A.3y and 3x
  2. B.6y and 4x
  3. C.3y and 6x
  4. D.5y and 5x
Show the answer and explanation

Answer: C (3y and 6x)

Explanation

Only 3y and 6x spends exactly the N12 income: 3 × 2 + 6 × 1 = 12. Options A leave money unspent; B and D cost more than N12.