Assume that the data in the accompanying table give an indifference curve for Mr. Chen. Graph this
Question:
Assume that the data in the accompanying table give an indifference curve for Mr. Chen. Graph this curve, putting A on the vertical axis and B on the horizontal axis. Assuming that the prices of A and B are $1.50 and $1, respectively, and that Mr. Chen has $24 to spend, add his budget line to your graph. What combination of A and B will Mr. Chen purchase? Does your answer meet the MRS = PB/ PA.” rule for equilibrium?
Units of A Units of B
16 ……………………………. 6
12 ……………………………. 8
8 ……………………………... 12
4 ……………………………... 24
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Economics
ISBN: 978-0073375694
18th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
Question Posted: