QUESTION 44A. Draw a map of three indifference curves with good A on the horizontal axis and good B onthe vertical axis.48. Draw a budget constraint line tangent to the middle indifference curve. Identify theoptimal quantity of good A on the horizontal axis as A1.4C. Rotate the budget constraint line if the price of good A increases. Make the new budgetconstraint line tangent to a different indifference curve. Identify the new optimal quantity ofgood A on the horizontal axis as A2.4D. Construct a 2-point demand curve for good A with the two quantity points A1 and A2 andinitial price p1 and new changed price p2.

This point (A1) is the optimal choice of good A under the given budget.

Answered: QUESTION 4 4A. Draw a map of three…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 2CQQ

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TOTAL AND MARGINAL UTILITY Reset E UTILITY CALCULATIONS Total Utility Quantity Consumed 70 Total Marginal Utility Utility 60 50 40 22 30 22 20 18 10 40 14 4 6. 8 54 Quantity Consumed Marginal Utility 10 20 4 64 6. 10 5 70 1 3 4 2 -10 72 -20 -2 Quantity Consumed 70 Quantity Consumed -6 64 1 6. 8.
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