Elle is very fond of cashews. Her goal is to consume as many cashews as possible. Cashews
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Elle is very fond of cashews. Her goal is to consume as many cashews as possible. Cashews come in small and large bags. There are oz qS in a small bag and oz q Lin a large.
a Draw Elles budget line when her budget for cashews is $ and the price of a large bag is p L is $ and the price of a small bag pS is $ Measure q S on the horizontal axis and q L on the vertical.
b How many small bags and how many large bags does Elle buy when m p L and pS
c Draw a picture of her indifference curve through her utility maximizing bundle.
d Give an example of a utility function that we can use to describe Elles preferences
Related Book For
Managerial Economics and Strategy
ISBN: 978-0134167879
2nd edition
Authors: Jeffrey M. Perloff, James A. Brander
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