Dora face sprices for chicken and fish of $3 per lbs. and $6 per lbs., respectively. Her
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Question:
Dora face sprices for chicken and fish of $3 per lbs. and $6 per lbs., respectively. Her consumption of the two commodities at various weekly allowance levels are shown below.
Allowance Chicken (lbs.) Fish (lbs.)
$45 5 5
$72 4 10
$100 3.33 15
a. Use the information to sketch her income consumption curve (ICC) on a graph. In your graph, pay attention to details. Indicate the slopes and intercepts of the budget lines, the equilibrium points as well as values of chicken and fish consumed.
b. Draw the Engel curves for both, chicken and fish.
c. What is the income elasticity of fish for Dora as the allowance increases from $72 to $100? What can you infer about the nature of this good, fish?
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