please answer d and e 6.5 (0) Shirley Sixpack, as you will recall, thinks that two 8-ounce caof beer are exactly as good as one 16-ounce can of beer. Suppose ththese are the only sizes of beer available to her and that she has $30spend on beer. Suppose that an 8-ounce beer costs $.75 and a 16-ourbeer costs $1. On the graph below, draw Shirley's budget line in blue inand draw some of her indifference curves in red.8-ounce cans403020101020304016-ounce cans(a) At these prices, which size can will she buy, or will she buy some ofeach?(b) Suppose that the price of 16-ounce beers remains $1 and the price of8-ounce beers falls to 8.55. Will she buy more 8-ounce beers?-(c) What if the price of 8-ounce beers falls to $.40? How many 8-ouncebeers will she buy then?.(d) If the price of 16-ounce beers is s1 each and if Shirley chooses some8-ounce beers and some 16-ounce beers, what must be the price of 8-ouncebeers?.(e) Now let us try to describe Shirley's demand function for 16-ounce beersas a function of general prices and income. Let the prices of 8-ounce and16-ounce beers be ps and pis: and let her income be m. If p16 < 2ps, thenthe mumber of 16-ounce beers she will demand is.If Pie > 2Ps.then the number of 16-ounce beers she will demand isIf Pie =ps, she will be indifferent between any affordable combinations.

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6.5 (0) Shirley Sixpack, as you will recall, thinks that two 8-ounce of beer are exactly as good as one 16-ounce can of beer. Suppose these are the only sizes of beer available to her and that she has $3 spend on beer. Suppose that an 8-ounce beer costs $.75 and a 16-o beer costs $1. On the graph below, draw Shirley's budget line in blue and draw some of her indifference curves in red. 8-ounce cans

6.5 (0) Shirley Sixpack, as you will recall, thinks that two 8-ounce of beer are exactly as good as one 16-ounce can of beer. Suppose these are the only sizes of beer available to her and that she has $3 spend on beer. Suppose that an 8-ounce beer costs $.75 and a 16-o beer costs $1. On the graph below, draw Shirley's budget line in blue and draw some of her indifference curves in red. 8-ounce cans

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.15P

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