Question: 19. Let us return to Question 5. Assume that the budget constraint is as specified, but we also know the preferences of the individual are

19. Let us return to Question 5. Assume that the budget constraint is as specified, but we also know the preferences of the individual are quasilinear and have the following shape. 5 4 3 Netflix Movies 2 2 3 4 Everything Else Recall from HW2 that quasilinear indifference curves are parallel shifts of each other. In this case, the parallel shift is horizontal. A. Assume it cost Netflix $0.10 per movie that it streams to its customers. Using what we know about graphical constrained optimization, make an argument as to whether Netflix will stay in business much longer. Specifically, make an argument as to how many movies an individual with these preferences will consume. Hint: Recall that the full indifference map will have many more of these indifference curves, all of which are a horizontal shift of the curves you see. In other words, there are many more indifference curves to the right of 13
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