A consumer has a current income of $60, which can be spent only on goods X...

  

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A consumer has a current income of $60, which can be spent only on goods X and Y. The price of good X is $3, and the price of good Y is $2. a) Graph the consumer's budget constraint, clearly labeling the intercepts and the slope of the budget line. b) Suppose that the consumer chooses to purchase 12 units of good X. On the same graph, show the consumer's utility-maximizing bundle (quantities of X and Y) and the indifference curve through this point. A consumer has a current income of $60, which can be spent only on goods X and Y. The price of good X is $3, and the price of good Y is $2. a) Graph the consumer's budget constraint, clearly labeling the intercepts and the slope of the budget line. b) Suppose that the consumer chooses to purchase 12 units of good X. On the same graph, show the consumer's utility-maximizing bundle (quantities of X and Y) and the indifference curve through this point.

Answer rating: 100% (QA)

Graph the consumers budget constraint The budget constraint for the consumer is given by Total Expen... View the full answer