Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a vegetarian's preferences over lentils and chicken. He always prefers more lentils to less. On the other hand, he does not care at all

Consider a vegetarian's preferences over lentils and chicken. He always prefers more lentils to less.

On the other hand, he does not care at all about chicken, i.e., he gets no utility out of eating chicken.

Given two consumption bundles of lentils and chicken, he will simply choose the one with more lentils,

no matter what the amounts of chicken in the two bundles are.

a)Draw this vegetarian's indifference curves between the two goods, with the amount of chicken

consumed measured on the horizontal axis and the amount of lentils consumed measured on the

vertical axis. (Don't draw just explain)

b)If the vegetarian's weekly budget for food is $200 and chicken and lentils cost $2 and $1.5 per

pound, respectively, what will his optimal consumption choice be? Explain your answer with a

diagram. (Just explain no drawing)

c) Now, suppose the vegetarian becomes allergic to chicken. Will your answers to part a) and b)

change?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Driven Technology

Authors: Paige Baltzan

8th Edition

1259924920, 978-1259924927

More Books

Students also viewed these Economics questions