Given above are some of the indifference curves for a student who consumes Burritos and Pizzas and the relevant budget line. Equilibrium is defined as the maximum utility or satisfaction given the consumer’s budget. The consumer has more indifference curves above I3, below I1, and between I1 and I2 and between I2 and I3. Out of all the indifference curves the consumer has, only I1, I2, and I3 are shown. The given budget line touches I2 at the point where I2 touches the y-axis (Burritos axis). (a) What is the point of consumer equilibrium in the above graph where the consumer is maximizing utility (satisfaction) given the budget line. Please show the point and label it as “A”. (b) At the equilibrium point how much Pizza does the student consume? (c) If the price of Pizzas decreased and the price of Burritos remained unchanged, would the quantity of Pizzas consumed at equilibrium increase or decrease compared to the equilibrium point A in the graph given above?
Given above are some of the indifference
The given budget line touches I2 at the point where I2 touches the y-axis (Burritos axis).
(a) What is the point of consumer equilibrium in the above graph where the consumer is maximizing utility (satisfaction) given the budget line. Please show the point and label it as “A”.
(b) At the equilibrium point how much Pizza does the student consume?
(c) If the
(d) If the price of Pizzas decreased and the price of Burritos remained unchanged, would the quantity of Burritos consumed at equilibrium increase or decrease compared to the equilibrium point A in the graph given above?
(e) If the price of Pizzas increased and the price of Burritos remained the same, would the consumer equilibrium point be different from point A or the same as point A in the graph given above?
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