Graph: Consumer Choice lan buys only chocolate-chip cookies and cashew nut milk. In year 1, lan earns $100. Cashew nut milk costs $2 per quart, and chocolate-chip cookies cost $4 per dozen. Draw a graph indicating lan's budget constraint and an indifference curve indicating optimum consumption. Then suppose that in year 2 all prices increase by 10% and that lan's salary increases by 10% as well. On the same graph, draw lan's new budget constraint and optimum consumption. Briefly explain how lan's optimal combination of cashew nut milk and chocolate-chip cookies in year 2 compares to the optimal combination in year 1.

Q: A consumer buys only two goods, X and Y. No other goods exist and there is no possibility of saving.…

A: (Note:Since there are multiple parts, only the first three have been solved).    Indifference (IC)…

Q: Vera considered Chips and Salsa perfect complements. She had $24 to spend on chips and salsa and she…

A: The two goods here are perfect complements. Which means that the goods are consumed in fixed…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: We are going to solve for utility maximization in case of perfect complements to answer this…

Q: Sue views hot dogs and hot dog buns as perfect complements in her consumption, and the corners of…

A: Correct Answer:  (C) She reduces her consumption by 2 packages of hot dogs and 2 packages of hot dog…

Q: The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget…

A: The utility is the amount of satisfaction received from the consumption of a good or service.

Q: Number of Cinema Tickets Total Utility MU/P for Cinema Tickets Marginal Utility Price of a Cinema…

A: The consumer equilibrium shows the maximization of the satisfaction of the consumer by spending his…

Q: In the diagram, Tanisha originally selects her consumption bundle at point A with 3 pounds of olives…

A: The theory of demand says that with an increase in price the demand for the commodity falls. Thus,…

Q: 6)       According to the law of diminishing marginal utility, _________? A) Additional consumption…

A: Law of diminishing marginal Utility: It says that by consuming more goods marginal utility will…

Q: When there is a calamity, the government provides help either in the form of food or cash. Which…

A: Cash grants and subsidies are two of the many types of help that are provided by the government to…

Q: Really need some help answering these questions, it’s all one problem but I understand that it’s…

A: Solution: Consumer 1: U(x1, x2) = x1 x2

Q: Draw Indifference curves to represent each of the following preferences in parts (a), (b) & (c)…

A: An indifference curve illustrates the combination of two goods that offer the customer with the same…

Q: Suppose the price of a candy bar is $1.25, the price of a bag of chips is $1.75, and the budget is…

A: If price of only one good increases (decreases), budget line rotates inward (outward) along the axis…

Q: Yunqin always gets twice as much satisfaction from an extra burger as he does from an extra Boost…

A: A consumer is indifferent between any two combinations of two goods when it comes to making a choice…

Q: Susan has the option to purchase eyeglasses, E, $3 each, and orange juice, O, $1 each. Her income is…

A: Budget line is the price line shows the various combinations of two goods that can be bought with…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Your classmate tells you that he is indifferent between three soft drinks and two hamburgers or two…

A: Indifference curve An indifference curve refers to a graphical representation of two combination of…

Q: Q2. Mary makes cheese sandwiches for herself every week, and she has her own receipt with two pieces…

A:

Q: Ursula views one cup of frozen yogurt to be a perfect substitute for three pieces of chocolate chip…

A: An indifference curve shows various combinations of two goods that give the consumer equal utility…

Q: Mrs. Griffiths earns $5000 a week and spend her entire income on dresses and handbags. Since these…

A: The indifference curve shows the combination of two goods and services that gives the same…

Q: Bill spends his money on flowers and cookies so as to maximize his total utility. Both flowers and…

A: Bill spends his money on flowers and cookies so as to maximize his total utility. Price of flowers…

Q: Bottles of water sell for 1 euro and slices of chocolate cake sells for 3 euros. Suppose Jack, whose…

A: The indifference curve illustrates the combinations of two goods that will give the same amount of…

Q: Brady, who has ordinary-shaped indifference curves, buys 16 ounces of salt each year. Even when the…

A:

Q: Lucia lives in Denver and enjoys drinking lattes and eating scones. The price of a latte is held…

A: Budget constraint shows all combinations of two goods that can be produced with the given level of…

Q: ottles of water sell for 1 euro and slices of chocolate cake sells for 5 euros. Suppose Jack, whose…

A: The indifference curve refers to the curve that shows the combinations of two goods that will give…

Q: Susan has the option to purchase eyeglasses, E, $3 each, and orange juice,O, $1 each. Her income is…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: A consumer buys only two goods, X and Y. No other goods exist and there is no possibility of saving.…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Draw Shahab’s budget constraint if he has income/ budget of Rs. 1000 which he can spend on buying…

A: Dear student, You have put multiple questions in single post. I am answering first question for you.…

Q: Q14. The slope of the calculated by taking the price of one good and dividing it by the price of the…

A: Budget constraint shows the combination of total expenditure of goods which are spent by consumer on…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: A perfect complement is a good that must be consumed with another good. The indifference curve of a…

Q: Consider indifference curves for the consumption of milk and chocolates (you may assume that both…

A: Answer - Option - d Given the same amount of chocolates, consumer A is willing to swap one bar of…

Q: 3.7 (0) Joan likes chocolate cake and ice cream, but after 10 slices of cake, she gets tired of…

A: Answer - Part (0) Answer -

Q: Can you give clear workings of the following question please? Bob views apples and oranges as…

A: Indifference curve: It is a graphical presentation of all the possible combinations of two goods…

Q: Suppose the price of an M&M is $2.00, the price of Skittles is $3.00, and the budget is $24. M&Ms…

A: Budget line shows the combinations of two goods that a consumer can purchase at given market price…

Q: A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a…

A: The weekly food budget of the consumer is $60 and price of one meal is $6 and one cup of O‘soup is…

Q: Gopal is a rational consumer and consumes two goods X and Y. Is a cardinal measure of utility or…

A: Indifference curve shows the various combinations of two commodities that provides the same level of…

Q: Riley has $6 to spend on ramen and apps for their phone. The price of a bowl of ramen is $2, and the…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Louis has stable preferences and consumes two goods, wine and cheese. In 1994, the price of wine was…

A: a. Given the Price of wine in 1994, W = $4 The price of cheese, C = $2 Income = $60 The quantity of…

Q: draw a budget constraint and indifference curves for pizza and pepsi .show what happens to budget…

A: A budget constraint refers to the different combinations of two commodities that can be consumed by…

Q: Assume that the data in the following table are an indifference curve for a consumer: a. graph this…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: Question 3: Samantha has $3,000 to spend on two goods: sandwiches and beer. The price of a sandwich…

A: Hey, Thank you for the question. According to our policy, we can only answer up to 3 subparts per…

Q: John is indifferent between canned soup and fresh soup. Canned soup sells for $1 per serving and…

A: Let's assume C is canned soup and F is fresh soup.  John is indifferent between canned soup and…

Q: Molly loves hamburgers and soft drinks, but insists on consuming exactly one soft drink for every…

A: Molly consumes 2 hamburgers with 1 soft drink. They both are complimentary goods for her.The graph…

Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.