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Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735 Exercise 7
[Uses the Indifference Curve Approach]
a. Draw a budget line for Cameron,who has a monthly income of $100. Assume that he buys steak and potatoes,and that steak costs $10 per pound and potatoes cost $2 per pound. Add an indifference curve for Cameron that is tangent to his budget line at the combination of 5 pounds of steak and 25 pounds of potatoes.
b. Draw a new budget line for Cameron,if his monthly income falls to $80. Assume that potatoes are an inferior good to Cameron. Draw a new indifference curve tangent to his new budget constraint that reflects this inferiority. What will happen to Cameron's potato consumption? What will happen to his steak consumption?
a. Draw a budget line for Cameron,who has a monthly income of $100. Assume that he buys steak and potatoes,and that steak costs $10 per pound and potatoes cost $2 per pound. Add an indifference curve for Cameron that is tangent to his budget line at the combination of 5 pounds of steak and 25 pounds of potatoes.
b. Draw a new budget line for Cameron,if his monthly income falls to $80. Assume that potatoes are an inferior good to Cameron. Draw a new indifference curve tangent to his new budget constraint that reflects this inferiority. What will happen to Cameron's potato consumption? What will happen to his steak consumption?
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Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
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