a. Use a graph to illustrate a family’s indifference curves for used clothing and other goods and services.
b. In your graph, draw two budget lines to show the effect of a fall in income on the quantity of used clothing purchased.
Most retailers are blaming the economy for their poor sales, but one store chain that sells used name-brand children’s clothes, toys, and furniture is boldly declaring that an economic downturn can actually be a boon for its business. Last year, the company took in $20 million in sales, up 5% from the previous year. Sales are already up 5% this year.