QUESTION 4 4A. Draw a map of three indifference curves with good A on the horizontal axis and good B on the vertical axis. 48. Draw a budget constraint line tangent to the middle indifference curve. Identify the optimal 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 budget constraint line tangent to a different indifference curve. Identify the new optimal quantity of good 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 and initial price p1 and new changed price p2.
QUESTION 4 4A. Draw a map of three indifference curves with good A on the horizontal axis and good B on the vertical axis. 48. Draw a budget constraint line tangent to the middle indifference curve. Identify the optimal 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 budget constraint line tangent to a different indifference curve. Identify the new optimal quantity of good 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 and initial price p1 and new changed price p2.
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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Transcribed Image Text:QUESTION 4
4A. Draw a map of three indifference curves with good A on the horizontal axis and good B on
the vertical axis.
48. Draw a budget constraint line tangent to the middle indifference curve. Identify the
optimal 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 budget
constraint line tangent to a different indifference curve. Identify the new optimal quantity of
good 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 and
initial price p1 and new changed price p2.
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