Cecil Consumes X₁ and X₂ in Fixed Proportions

question 63

Multiple Choice

Cecil consumes x₁ and x₂ in fixed proportions.He consumes A units of good 1 with B units of good 2.To solve for his demand functions for goods 1 and 2,

• A)set MU₁/MU₂ = p₁/p₂ and solve for x₁.
• B)solve the following two equations in two unknowns: Ax₁ = Bx₂ and p₁x₁ + p₂x₂ = m.
• C)solve the following two equations in two unknowns: Bx₁ = Ax₂ and p₁x₁ +p₂x₂ = m.
• D)you only need to use the equation given by his budget line.
• E)use the fact that he spends all of his income on good 1 so long as it is the cheaper good.

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Definitions:

Insufficient Thiamine

A condition resulting from a lack of thiamine (vitamin B1), which can lead to neurological problems and diseases such as beriberi.

Korsakoff's Syndrome

A chronic memory disorder caused by severe deficiency of thiamine (vitamin B1), often linked to alcohol abuse, characterized by memory loss, confabulation, and difficulty acquiring new information.

Insufficient Dopamine

A condition where there is an inadequate level of dopamine in the brain, which can affect mood, movement, and cognition.

Excessive Dopamine

An abnormally high level of dopamine in the brain, which can lead to various disorders, including schizophrenia and addiction.