just the answers for Budget line indifference curve graph multiple answer choice Suppose a person has $100,000 of income and chooses to divide his income so he spends 60% of his income on Good P and 40% on Good G.Enter whole numbers e.g. enter 5 not 5.0.Do not include commas, e.g enter 5,000 as 5000.The price of Good P is 5.W = 20000 units of Good P.If the PG = $10, then Z = 4000 and X = 10000.**Graph Explanation:**The graph illustrates the consumption choices between Good P and Good G based on their respective budgets. - The vertical axis represents Good P.- The horizontal axis represents Good G.- Point W on the vertical axis denotes the point where all income is spent on Good P (20,000 units).- Point Z on the horizontal axis represents the scenario where all income is spent on Good G when PG = $10.- Point X indicates an alternative scenario of quantity for Good G (10,000 units).There are two indifference curves, IC1 and IC2:- IC1 (blue curve) is further away from the origin, indicating a higher level of utility or satisfaction.- IC2 (red curve) is closer to the origin, indicating a lower level of utility.The tangency points of the budget constraint with the indifference curves represent the optimal consumption bundles offering the highest satisfaction under the given budget constraints. **Continuing from the previous question.**### Graph Description:The graph presented is a Budget Line/Indifference Curve graph. It illustrates combinations of two goods, Good P and Good G, that a person can choose based on their income, the price of the goods, and personal preferences. The vertical axis represents Good P, marked with values W and 12000, while the horizontal axis represents Good G, marked with values Z and X. Two indifference curves, $ IC_1 $ and $ IC_2 $, are shown, with $ IC_2 $ closer to the origin, indicating a lower level of utility. Points A, B, and C are marked on the graph across different curves.### Text and Analysis:The Budget Line/Indifference Curve graph can show what combination of 2 goods a person will choose based on their income, the price of the two goods, and their tastes and preferences.- A person's tastes and preferences are represented by **indifference curves**. - The person will not choose point B because at point B, **the opportunity cost of G is high**.This means the person can move to a higher indifference curve and be happier if they **sell units of good P at the margin**.At point B, the MRSG **is greater than** the Opportunity Cost of G.This means that at point B, if the person gave up one unit of G, sold it, and took the money and bought Good P, **he would make himself sadder**. This happens because the value of good P in consumption is **less** than the value of the good in exchange.

Answering just the Budget line indifference curve graph as asked.

Continuing from the previous question. GoodP 12000 Good G The Budget Line/Indifference Curve graph can show what combination of 2 goods a person will choose based on his income, the price of the two goods, and his tastes and preferences. A person's tastes and preferences are represented by indifference curves. The person will not choose point B because at point B the opportunity cost of G is v This means the person can move to a higher indifference curve and be happier if they sell units of good P at the ma At point B, the MRSC is greater than than the Opportunity Cost of G. This means that at point B, if the person gave up one unit of G, sold it, and took the money and bought Good P he would make himself sadde v . This happens because the value of good P in consumption is less than the value of the good in exchange.

Continuing from the previous question. GoodP 12000 Good G The Budget Line/Indifference Curve graph can show what combination of 2 goods a person will choose based on his income, the price of the two goods, and his tastes and preferences. A person's tastes and preferences are represented by indifference curves. The person will not choose point B because at point B the opportunity cost of G is v This means the person can move to a higher indifference curve and be happier if they sell units of good P at the ma At point B, the MRSC is greater than than the Opportunity Cost of G. This means that at point B, if the person gave up one unit of G, sold it, and took the money and bought Good P he would make himself sadde v . This happens because the value of good P in consumption is less than the value of the good in exchange.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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