Studies put the cost of raising a child up to the age of 18 at about (

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Studies put the cost of raising a child up to the age of 18 at about \(€ 9,000\) per year, so when a child is born, parents may have to make some sacrifices. Before having their first child, Ivan and Emma would often go out for dinner at fancy restaurants. However, dining out now involves extra costs associated with it, for example, planning and preparing for an evening out, and locating, engaging, and paying for a suitable caregiver. As the cost of restaurant meals has gone up, they now dine at home most evenings. Use an indifference curve-budget line diagram with "Dining out" on the horizontal axis and "Dining in" on the vertical axis to show how having a child has affected Ivan and Emma's optimal choice, assuming a constant budget.

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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