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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Higher-End Product

Goods that are considered of superior quality and higher price, often associated with luxury or premium branding.

Sales Process

A series of steps taken by a company to move a product or service from the initial contact with a potential customer to the final transaction.

Cross-Selling

The practice of suggesting related products or services to a customer who is considering or making a purchase, with the aim of increasing sales.

Formula Selling

A predefined, structured approach to sales that follows a specific formula or set of rules.