Need help with my Economics question – I’m studying for my class.
Question1:
Consumer Preferences
1) Consider an indifference map which consists of vertical lines. What can you say about the consumer’s preferences for these two goods?
2) How will the indifference map of this consumer change if the two goods are interchanged on the two axes? (That is, good earlier on the x-axis is moved to y-axis and good earlier on the y-axis is moved to x-axis.)
Question2:
Effects of Income Changes
What is the difference between the income consumption curve and the Engel curve?
(Word limit: 50 – 100 words)
Question3:
Optimal Consumption Bundle
Why does the optimal consumption bundle occur where the budget line is tangent to the indifference curve? (Assume that the indifference curves are convex as in Ch. 3 ppt, slide 7)
(Word limit: 50 – 100 words)
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