10. Deriving demand from an inddference map Frances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem that the price of an Americano is held constant at $3. On the following graph, the purple curves (I and Ia) describe two of Frances's indifference curves. The lines BC, and BC represent tro budget constraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints. AMERICANOS 1 DANISHES 14 16 Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danishes is

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10. Deriving demand from an indiference map
Frances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem
that the price of an Americano is held constant at $3.
On the following graph, the purple curves (I and I₂) describe two of Frances's indifference curves. The lines BC, and BC, represent bro budget
constraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints.
AMERICANOS
R2Xpe
16
14
DANISHES
12
14
ON
18 AK 20
Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danahes is
Transcribed Image Text:10. Deriving demand from an indiference map Frances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem that the price of an Americano is held constant at $3. On the following graph, the purple curves (I and I₂) describe two of Frances's indifference curves. The lines BC, and BC, represent bro budget constraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints. AMERICANOS R2Xpe 16 14 DANISHES 12 14 ON 18 AK 20 Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danahes is
thing the income artiount you just computed, complete the following table fry finding the price of a danish when BC represents Frances's budget
constraint and when IC represents her bodget constraint. Then indicate the quantity of danishes consumed in each of those scenarios
Price
When Frances's budget constraints (Dollars per danish)
BO
BO
Given the price quantity combinations from the preceding table, use the blue ine (circle symbol) to plot Frances's demand for danishes on the
following graph.
Consumption
(Danishes)
Hint: Assume that Frances's demand for danishes is a straight line. You should derive two points on the demand curve from the preceding graph.
Then place the blue line on the following graph so that it passes through these two points.
(2)
PRICE(Doe de
1221
QUANTITY (Danish)
Demand
Transcribed Image Text:thing the income artiount you just computed, complete the following table fry finding the price of a danish when BC represents Frances's budget constraint and when IC represents her bodget constraint. Then indicate the quantity of danishes consumed in each of those scenarios Price When Frances's budget constraints (Dollars per danish) BO BO Given the price quantity combinations from the preceding table, use the blue ine (circle symbol) to plot Frances's demand for danishes on the following graph. Consumption (Danishes) Hint: Assume that Frances's demand for danishes is a straight line. You should derive two points on the demand curve from the preceding graph. Then place the blue line on the following graph so that it passes through these two points. (2) PRICE(Doe de 1221 QUANTITY (Danish) Demand
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