In a graph with y on the horizontal axis and a composite private good x on the
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In a graph with y on the horizontal axis and a composite private good x on the vertical, illustrate my budget constraint assuming that y2 5 0. How does this budget constraint change when y2 . 0? Show that, if tastes are homothetic, I will end up consuming more y when y2 . 0 but will myself purchase less y. Does this hold whenever y and x are both normal goods? Does it hold if y is an inferior good?
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Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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