The following figure shows the indifference curves and two budget line of student Tuna whose choices are apple and banana. The Initial price of Banana is €4/kg, when budget line is B1. Initially Tuna was at equilibrium at point A. Answer the following questions according to the information given on the diagram. Show your calculations below. a. What is the weekly Income of Tuna? (^) b. If Tuna's initial preference is at A how much Banana she consumes? ( c. If Price of Banana decreases to €3/kg and she moves to point B, how much Apple she will consume at B? (.

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 3SQP
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The following figure shows the indifference curves and two budget line of student Tuna whose choices are apple and banana.
The Initial price of Banana is €4/kg, when budget line is B1. Initially Tuna was at equilibrium at point A. Answer the following
questions according to the information given on the diagram. Show your calculations below.
a. What is the weekly Income of Tuna? ().
b. If Tuna's initial preference is at A how much Banana she consumes? ("
c. If Price of Banana decreases to €3/kg and she moves to point B, how much Apple she will consume at B? (.
d. If the demand curve for Banana will be derived by using the indifference curves on figure 1, what will be the Price and quantity
coordinates of Point A and Point B on figure 2?
Apples
Price
Bananas
Quantity
Transcribed Image Text:The following figure shows the indifference curves and two budget line of student Tuna whose choices are apple and banana. The Initial price of Banana is €4/kg, when budget line is B1. Initially Tuna was at equilibrium at point A. Answer the following questions according to the information given on the diagram. Show your calculations below. a. What is the weekly Income of Tuna? (). b. If Tuna's initial preference is at A how much Banana she consumes? (" c. If Price of Banana decreases to €3/kg and she moves to point B, how much Apple she will consume at B? (. d. If the demand curve for Banana will be derived by using the indifference curves on figure 1, what will be the Price and quantity coordinates of Point A and Point B on figure 2? Apples Price Bananas Quantity
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