2. A consumer has income of 3000. Bread is priced at 3 a loaf and cheese is...

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2. A consumer has income of €3000. Bread is priced at €3 a loaf and cheese is priced at €6 a kilo.

a. Draw the consumer’s budget constraint. What is the slope of this budget constraint?

b. Draw a consumer’s indifference curves for wine and cheese. Pick a point on an indifference curve for wine and cheese and show the marginal rate of substitution.

What does the marginal rate of substitution tell us?

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Business Economics

ISBN: 388402

2nd Edition

Authors: Mark P. Taylor, Andrew Ashwin, N. Gregory Mankiw

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Question Posted: Nov 04, 2024 10:00 AM

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2. A consumer has income of 3000. Bread is priced at 3 a loaf and cheese is...

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Business Economics

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