Question
The following graph shows a portion of a consumer's indifference map. The consumer faces the budget line LZ, and the price of Z is $
The following graph shows a portion of a consumer's indifference map. The consumer faces the budget line LZ, and the price of Z is $ 20.
a. The consumer's income is ______.
b. The price of Y is _______.
c. The budget line equation is ____________________
d. What combination of X and Y does the consumer choose and why?
e. The marginal rate of technical substitution for the combination is ________.
f. Explain in terms of MRS why the consumer does not choose either combination A or B?
g. what combination is chosen if the budget line is MZ?
h. What is the price of X?
i. What is the price of Y?
j. What is the MRS in equilibrium?
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