1. Assume that the data in the accompanying table give an indifference curve for Mr. Chen. Graph this curve, putting A on the vertical axis and B on the horizontal axis. Assuming that the prices of A and B are $1.50 and $1, respectively, and that Mr. Chen has $24 to spend, add his budget line to your

graph. What combination of A and B will Mr. Chen purchase?
Does your answer meet the MRS 5 PByPA rule for equilibrium? LO6

Transcribed Image Text:

Units of A 16 12 Units of B 6 82 8 12 4 24