Economics 1. Imagine you have $1000 of income to spend on two goods, x1 and x2. ASSUME BOTH AR NORMAL GOODS. The price of x2 is p2 = 20. Holding p2 constant, draw your three budget line: show what your indifference curves might look like, and based on these what your optima bundles would be for three different prices for x1: p1 = 40, pi' 20, and pi" = 10. Then use this information to derive your demand curve for x1. %3D %3D

Economics 1. Imagine you have $1000 of income to spend on two goods, x1 and x2. ASSUME BOTH AR NORMAL GOODS. The price of x2 is p2 = 20. Holding p2 constant, draw your three budget line: show what your indifference curves might look like, and based on these what your optima bundles would be for three different prices for x1: p1 = 40, pi' 20, and pi" = 10. Then use this information to derive your demand curve for x1. %3D %3D

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 25SQ

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