2. Suppose you are having a party in half an hour and you have two 6-packs of...

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2. Suppose you are having a party in half an hour and you have two 6-packs of beer in your refrigerator. One is an imported premium beer, and the other is a standard domestic beer. A neighbor comes to you and asks you to trade some imported premium beer for the standard domestic beer, since he is also having a party. You agree to trade 2 premium bottles for 3 standard bottles.

Twenty minutes later, the neighbor comes back and asks for 2 more premium bottles. Will you still trade on a 2 premium for 3 standard basis? Suppose you demand 4 standard bottles for two premium bottles.

What property of indifference curves is illustrated by this example?

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Principles Of Microeconomics

ISBN: 9784492370292

6th Edition

Authors: John B. Taylor, Akila Weerapana

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