Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A consumer has income of 30,000 a year and divides this income between buying food and spending on leisure. The average price of a unit
A consumer has income of 30,000 a year and divides this income between buying food and spending on leisure. The average price of a unit of food is 15 and the average price of a unit of leisure if 10. Draw the consumer's budget constraint and draw the indifference curve if the consumer would like to consume leisure and food in equal amounts. Show the consumer's optimum. Discuss how an indifference curve can be drawn if goods are (i) perfect substitutes, and (ii) perfect complements.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started