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37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.

37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...
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Juice e2 e₁ 15 18 25 B2 Soda 37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.
Transcribed Image Text:Juice e2 e₁ 15 18 25 B2 Soda 37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.
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