Problem 1
When prices are \(\left(p_{1}, p_{2}\right)=(1,2)\) a consumer demands \(\left(x_{1}, x_{2}\right)=(1,2)\) and when prices are \(\left(q_{1}, q_{2}\right)=(2,1)\) the consumer demands \(\left(y_{1}, y_{2}\right)=(2,1)\) Is this behavior consistent with the model of maximizing behavior?
Problem 2
When prices are \(\left(p_{1}, p_{2}\right)=(2,1)\) a consumer demands \(\left(x_{1}, x_{2}\right)=(1,2)\) and when prices are \(\left(q_{1}, q_{2}\right)=(1,2)\) the consumer demands \(\left(y_{1}, y_{2}\right)=(2,1)\) Is this behavior consistent with the model of maximizing behavior?
Problem 4
We saw that the Social Security adjustment for changing prices would typically make recipients at least as well-off as they were at the base year. What kind of price changes would leave them just as well-off, no matter what kind of preferences they had?
