6. 5 4. 3 1 1 2 3.4 56789 10 11 12 13 14 15 1 2 3 4 5 6 78 9 10 Qwater (gallons) Qcatfood (bags) a) Use the information in the diagrams to draw Biff's budget line and indifference curve diagram representing how Biff chose his optimal bundle last week. Be sure to label all curves and important points in your diagram, and also the axes. Be sure to explain what each curve and important point represents about Biff. b) At the optimal bundle you show in the diagram you drew for part a), what is the ratio between Biff's MU of a gallon of water and his MU of a bag of cat food? In other words, what is the value of the following fraction, and how do you know this? MUwater MUcat food
6. 5 4. 3 1 1 2 3.4 56789 10 11 12 13 14 15 1 2 3 4 5 6 78 9 10 Qwater (gallons) Qcatfood (bags) a) Use the information in the diagrams to draw Biff's budget line and indifference curve diagram representing how Biff chose his optimal bundle last week. Be sure to label all curves and important points in your diagram, and also the axes. Be sure to explain what each curve and important point represents about Biff. b) At the optimal bundle you show in the diagram you drew for part a), what is the ratio between Biff's MU of a gallon of water and his MU of a bag of cat food? In other words, what is the value of the following fraction, and how do you know this? MUwater MUcat food
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Measuring The Cost Of Living
Section: Chapter Questions
Problem 2PA
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