Ginting likes both orange juice and apple juice. He consumes nothing else. The consumption bundle where Ginting consumes XA bottles of orange juice per year and XB bottles of apple juice per year is written as (XA, XB). Last year, Ginting consumed 28 bottles of orange juice and 7 bottles of apple juice. Ginting is indifferent between (XA, XB) and (28,7) is the set of all bundles such that XB = 196/XA. The set of bundles (XA, XB) such that Ginting is just indifferent between (XA, XB) and the bundle (14, 21) is the set of bundles such that XB = 294/XA. A. Identify on the graph several points that lie on the indifference curve that passes through the point (28, 7), and sketch this curve, using blue ink. Do the same, using red ink, for the indifference curve passing through the point (14, 21). B. Use grey ink to shade in the set of commodity bundles that Ginting weakly prefers to the bundle (28, 7). Use blue ink to shade in the set of commodity bundles such that Ginting weakly prefers (14, 21) to these bundles. C. What is his marginal rate of substitution at the point (28, 7)?
Ginting likes both orange juice and apple juice. He consumes nothing else. The consumption bundle where Ginting consumes XA bottles of orange juice per year and XB bottles of apple juice per year is written as (XA, XB). Last year, Ginting consumed 28 bottles of orange juice and 7 bottles of apple juice. Ginting is indifferent between (XA, XB) and (28,7) is the set of all bundles such that XB = 196/XA. The set of bundles (XA, XB) such that Ginting is just indifferent between (XA, XB) and the bundle (14, 21) is the set of bundles such that XB = 294/XA. A. Identify on the graph several points that lie on the indifference curve that passes through the point (28, 7), and sketch this curve, using blue ink. Do the same, using red ink, for the indifference curve passing through the point (14, 21). B. Use grey ink to shade in the set of commodity bundles that Ginting weakly prefers to the bundle (28, 7). Use blue ink to shade in the set of commodity bundles such that Ginting weakly prefers (14, 21) to these bundles. C. What is his marginal rate of substitution at the point (28, 7)?
ChapterA: Working With Diagrams
Section: Chapter Questions
Problem 1QP
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Ginting likes both orange juice and apple juice. He consumes nothing else. The consumption bundle where Ginting consumes XA bottles of orange juice per year and XB bottles of apple juice per year is written as (XA, XB). Last year, Ginting consumed 28 bottles of orange juice and 7 bottles of apple juice. Ginting is indifferent between (XA, XB) and (28,7) is the set of all bundles such that XB = 196/XA. The set of bundles (XA, XB) such that Ginting is just indifferent between (XA, XB) and the bundle (14, 21) is the set of bundles such that XB = 294/XA.
A. Identify on the graph several points that lie on the indifference curve that passes through the point (28, 7), and sketch this curve, using blue ink. Do the same, using red ink, for the indifference curve passing through the point (14, 21).
B. Use grey ink to shade in the set of commodity bundles that Ginting weakly prefers to the bundle (28, 7). Use blue ink to shade in the set of commodity bundles such that Ginting weakly prefers (14, 21) to these bundles.
C. What is his marginal rate of substitution at the point (28, 7)?
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