Celine won the prize at the end-of-year party and she had to choose between a $100 Amazon gift card and a bag of coffee worth $120. Celine chose the $100 gift card. Please use a diagram and sentences to explain and show her budget line and indifference curve, and explain her choice is rational.

Celine won the prize at the end-of-year party and she had to choose between a $100 Amazon gift card and a bag of coffee worth $120. Celine chose the $100 gift card. Please use a diagram and sentences to explain and show her budget line and indifference curve, and explain her choice is rational.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 5QP

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Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.

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