1. For this exercise you'll be drawing a graph where we represent amounts of cookies purchased on the horizontal axis and amounts of coffee purchased on the vertical-axis. Ben's indifference curves all have a constant slope of -2. Draw a set of Ben's indifference curves and draw Ben's budget constraint if cookies cost $2 and coffee costs $4 and Ben has $12 available to spend. 2. What does Ben optimally purchase? Explain. 3. Suppose Ben is currently consuming 3 coffees and no cookies. At this point, Ben's marginal utility of cookies is 2 and Ben's marginal utility of coffee is 1. Using the prices from above: cookies cost $2 and coffee costs $4, how would you advise Ben to adjust his consumption if Ben wishes to optimize? Explain.
1. For this exercise you'll be drawing a graph where we represent amounts of cookies purchased on the horizontal axis and amounts of coffee purchased on the vertical-axis. Ben's indifference curves all have a constant slope of -2. Draw a set of Ben's indifference curves and draw Ben's budget constraint if cookies cost $2 and coffee costs $4 and Ben has $12 available to spend. 2. What does Ben optimally purchase? Explain. 3. Suppose Ben is currently consuming 3 coffees and no cookies. At this point, Ben's marginal utility of cookies is 2 and Ben's marginal utility of coffee is 1. Using the prices from above: cookies cost $2 and coffee costs $4, how would you advise Ben to adjust his consumption if Ben wishes to optimize? Explain.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 2QFR
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can someone please draw the graphs for this problem please and explain how to solve it.
Transcribed Image Text:1. For this exercise you'll be drawing a graph where we
represent amounts of cookies purchased on the horizontal axis
and amounts of coffee purchased on the vertical-axis. Ben's
indifference curves all have a constant slope of -2. Draw a set of
Ben's indifference curves and draw Ben's budget constraint if
cookies cost $2 and coffee costs $4 and Ben has $12 available
to spend.
2. What does Ben optimally purchase? Explain.
3. Suppose Ben is currently consuming 3 coffees and no
cookies. At this point, Ben's marginal utility of cookies is 2 and
Ben's marginal utility of coffee is 1. Using the prices from
above: cookies cost $2 and coffee costs $4, how would you
advise Ben to adjust his consumption if Ben wishes to optimize?
Explain.
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