5.3 What is the slope (value) of Mrs. Bain budget line? 5.4 In theory, what is the slope (value) of the indifference curve at Mrs. Bain's utility maximization point? Justify your answer. Days of skiing per semester 7 6 5 3 2 1 0 W S T Ms. Bain maximizes utility (given her budget constraint) at point X, skiing 2 days and spending 3 days horseback riding. Budget line X U N Y Curve B Curve A Curve C V 2 3 4 5 6 7 1 Days of horseback riding per semester Part II Graph

5.3 What is the slope (value) of Mrs. Bain budget line? 5.4 In theory, what is the slope (value) of the indifference curve at Mrs. Bain's utility maximization point? Justify your answer. Days of skiing per semester 7 6 5 3 2 1 0 W S T Ms. Bain maximizes utility (given her budget constraint) at point X, skiing 2 days and spending 3 days horseback riding. Budget line X U N Y Curve B Curve A Curve C V 2 3 4 5 6 7 1 Days of horseback riding per semester Part II Graph

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.

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5.3 What is the slope (value) of Mrs. Bain budget line?
5.4 In theory, what is the slope (value) of the indifference curve at Mrs. Bain's utility
maximization point? Justify your answer.
W
7
Ms. Bain maximizes
6.
utility (given her
budget constraint)
at point X, skiing 2
days and spending 3
days horseback riding.
5
4
S
Budget
line
3
Curve B
2
U
Y
Curve A
v Curve C
0
1 2 3 4 5 6 7
Days of horseback riding per semester
Part II Graph
Days of skiing per semester
1,

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