Question
please hel me to draw the graph For this assignment, you will be utilizing what we have learned this unit to draw a budget constraint
please hel me to draw the graph
For this assignment, you will be utilizing what we have learned this unit to draw a budget constraint and some indifference curves to describe the situation of a rational agent.
Please submit your answers in a word doc.
Imagine our rational agent has $90. They are considering buying some combination of burgers and fries. Burgers cost $6 and fries cost $4.50.
1. BY HAND Draw a budget constraint for this situation. Remember to label both axes.
Hint, first you should find out what the intercepts are -- then you can just draw a line connecting them. Take a picture of the graph you drew and copy it into your document.
- On this first graph, by hand, draw the indifference curve which corresponds to the utility maximizing bundle and label the bundle. You can make up whatever bundle you want, just make sure your indifference curve conforms to the assumptions we made about them in this unit. Take a picture of the graph you drew and copy it into your document.
- ) Now, imagine our agent's income goes up. Now they have $108 to spend. On your graph, by hand, draw how the budget constraint will shift because of this. Take a picture of the graph you drew and copy it into your document.
- ) By hand on the same graph, draw the new utility maximizing indifference curve. Indicate the new bundle the agent will pick. Once again, you can make up whatever bundle you want so long as it does not violate the assumptions we made. Take a picture of the graph you drew and copy it into your document.
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