The economy below has a linear production possibility frontier, given by C=Y-G/q. The government has become more efficient at producing the public good (q increases from q1 to q2), which produces a rotation in the production possibility frontier. The private good (c) is a normal good. The public good is, however, an inferior good. In which area (1,2,3) will the indifference curve of the consumer be after the change? 1

The economy below has a linear production possibility frontier, given by C=Y-G/q. The government has become more efficient at producing the public good (q increases from q1 to q2), which produces a rotation in the production possibility frontier. The private good (c) is a normal good. The public good is, however, an inferior good. In which area (1,2,3) will the indifference curve of the consumer be after the change? 1

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 4SQ

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