MICROECONOMICSEXERCISE NO.Consumer Theoryl Indifference curve approach)1. A consumer has an income of Php 3,000.00 per periad. He spends it an faad and clothing, withprices at Php 150.00 per unit and Php100.00 per unit, respectively.a. Draw the consumer's budget line, placing food on the Y axis and clothing on the X axis.Label it as BL1.b. Suppose the price of faad doubles, show what happens to the budget line. Using the samegraph in letter a, sketch the new budget line and label it as BL2-c. Starting from the initial income and price levels, suppose the consumer's income falls by20%, draw the new budget line in the same graph used in a and b and label it as BL3.2. Below is the Indifference curve map of an individual for products X and Y.U320U24050 0100 110a. Which indifference curve gives the highest level of satisfaction ?A. U1b. Can the consumer purchase 100 units of product X and 80 units of product Y? Why or whynat?c. Should the consumer buy or consume combination B? Why ar why nat?Among combinations A, D and C, which is the preferred combination afgoads X and Y? Explain your answer.e. What is the optimal combination of X and Y?f. How much will be the consumer's total expenditure an food and clothing if he buys thecombination in letter e. Prices of products X and Y are Php50.00 and Php 100.00 eachrespectively.B. U2 CU3? Why?d.BR

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1. A consumer has an income of Php 3,000.00 per periad. He spends it an faad and clothing, with prices at Php 150.00 per unit and Php100.00 per unit, respectively. a. Draw the consumer's budget line, placing faad on the Y axis and clothing on the X axis. Label it as BL1. b. Suppose the price of faad doubles, show what happens to the budget line. Using the same graph in letter a, sketch the new budget line and label it as BL2. c. Starting from the initial income and price levels, suppose the consumer's income falls by 20%, draw the new budget line in the same graph used in a and b and label it as BL3. C.

1. A consumer has an income of Php 3,000.00 per periad. He spends it an faad and clothing, with prices at Php 150.00 per unit and Php100.00 per unit, respectively. a. Draw the consumer's budget line, placing faad on the Y axis and clothing on the X axis. Label it as BL1. b. Suppose the price of faad doubles, show what happens to the budget line. Using the same graph in letter a, sketch the new budget line and label it as BL2. c. Starting from the initial income and price levels, suppose the consumer's income falls by 20%, draw the new budget line in the same graph used in a and b and label it as BL3. C.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 2SQP

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