Attainable combinations of X and Y are drawn on the assumption that PX...
Constant PX and PY:
- When PX and PY are constant, the combinations of X and Y that can be attained are limited to a specific range. For example, if PX = $2 and PY = $1, the possible combinations could be (1X, 2Y), (2X, 4Y), (3X, 6Y), and so on. These combinations will always maintain the same ratio of PX to PY.
Variable PX and PY:
- If PX and PY are variable, the combinations of X and Y that can be attained will vary based on the changing prices. For instance, if PX = $3 and PY = $2 at one point in time, the combinations could be (1X, 1.5Y), (2X, 3Y), (3X, 4.5Y), and so on. As the prices fluctuate, the achievable combinations will also change accordingly.
Change in the same ratio:
- When PX and PY change in the same ratio, the combinations of X and Y that can be attained will adjust proportionally. For example, if both PX and PY double, the possible combinations would also double while maintaining the same ratio between X and Y. This relationship allows for flexibility in adjusting quantities based on price changes.
Equal PX and PY:
- If PX and PY are equal to each other, the combinations of X and Y that can be attained will be balanced in terms of cost. For instance, if PX = PY = $2, the possible combinations could be (1X, 1Y), (2X, 2Y), (3X, 3Y), and so on. This equality in prices ensures that the cost of each unit of X is the same as the cost of each unit of Y, leading to a balanced trade-off between the two goods.
Attainable combinations of X and Y are drawn on the assumption that PX...
(C) Change in the Same Ratio
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