3. Juliette spends $48 each month on Oreo cookies (which cost $2 per package) and salt and vinegar chips (which cost $3 per bag). a) Suppose that the price of chips falls to $2 per bag and Juliette increases her chip consumption to 8 bags each month. Draw Juliette's new budget constraint and indicate her chosen bundle with an appropriately drawn indifference curve. Label her utility-maximizing bundle with the letter B. (Be sure to determine the right quantities of both chips and Oreos!) %3D %3D

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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3. Juliette spends $48 each month on Oreo cookies (which cost $2 per package) and salt and
vinegar chips (which cost $3 per bag).
a) Suppose that the price of chips falls to $2 per bag and Juliette increases her chip
consumption to 8 bags each month. Draw Juliette's new budget constraint and
indicate her chosen bundle with an appropriately drawn indifference curve. Label
her utility-maximizing bundle with the letter B. (Be sure to determine the right
quantities of both chips and Oreos!)
-LJ-J-1.
IIII
IIII
J-L--- -1-1-L
-LJ-J- 1-
--+-+
--1-1 -
IIII
ת - ד -ר
IIII
III I
IIII
IIII
L -1-L----1-1-L-- L--L-
-LJ-J-1-
IIII
-LJ-J- 1-
IIII
IIII
-+---
--+-+
Transcribed Image Text:3. Juliette spends $48 each month on Oreo cookies (which cost $2 per package) and salt and vinegar chips (which cost $3 per bag). a) Suppose that the price of chips falls to $2 per bag and Juliette increases her chip consumption to 8 bags each month. Draw Juliette's new budget constraint and indicate her chosen bundle with an appropriately drawn indifference curve. Label her utility-maximizing bundle with the letter B. (Be sure to determine the right quantities of both chips and Oreos!) -LJ-J-1. IIII IIII J-L--- -1-1-L -LJ-J- 1- --+-+ --1-1 - IIII ת - ד -ר IIII III I IIII IIII L -1-L----1-1-L-- L--L- -LJ-J-1- IIII -LJ-J- 1- IIII IIII -+--- --+-+
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