Ask Question, Ask an Expert


Ask Business Economics Expert

Analyzing the budget line & indifference map for two goods food & clothing.

469_food & clothing.jpg

The diagram below shows the budget line and the indifference map of a consumer for two products, food and clothing.

1.Compute the four points w, x, y, and z in terms of total utility and also affordability and describe why point z is the optional consumption point.

2.If there is a drop in the price of clothing, how will the budget line be affect? Illustrate what will happen to the consumption of clothing is a normal good?



Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M922865

Have any Question? 

Related Questions in Business Economics

Describe the current state of the us economy using the two

Describe the current state of the U.S. economy using the two monetary aggregates (M1 and M2) currently published by the Federal Reserve. In your description, illustrate the trends of the two monetary aggregates. Evaluate ...

From california to new york legislative bodies across the

From California to New York, legislative bodies across the US are considering eliminating or reducing the surcharges that banks impose on non-customers who make $12 million in withdrawals from other banks’ ATMs. On avera ...

Here is the balance sheet of a bank required reserves are

Here is the balance sheet of a bank. Required reserves are 10 percent of eposits. Suppose the bank prefers not to change ROE in the face of a liquidity shock. Show that the bank prefers liability adjustment over asset ad ...

Transparency internationals corruption perceptions index

Transparency International's Corruption Perceptions Index (CPI) is a comparative assessment of a country's integrity performance. Provide a brief analysis (not a description) of this index and its ranking using concepts ...

General electric develops a new type of high-tech mri

General Electric develops a new type of high-tech MRI machine. GE has a patent on the machine and therefore is essentially a monopolist. After hiring consultants to study the market,GE’s best estimate of the potential de ...

Making a java program with in which i to create a main in

Making a Java program with in which I to create a main() in it and another code file with a separate class. Also needs creating objects of the class in the running program. The system handles employee records and process ...

1 explain why a bundle of goods cannot be optimal ie why

1) Explain why a bundle of goods cannot be optimal (i.e., why some other bundle must be a better choice) if the marginal rate of substitution (MRS) at this point is not equal to the ratio of the goods’ prices. 2) A consu ...

How do average variable cost average fixed cost and

How do average variable cost, average fixed cost, and marginal cost vary as production levels for a firm are increased? Draw a curve for average fixed cost (AFC) as production increases, and explain why the curve continu ...

What are your thoughts on what the book has to say about

What are your thoughts on what the book has to say about advertising? Are ads manipulative? Or, do they also serve other purposes? Think back however many years since the first iPod was introduced to the market. Would yo ...

Consider the following game there are two players 1 and 2

Consider the following game. There are two players, 1 and 2. They will play either Matching Quarters version A (with player 1 moving first), Modified Matching Quarters version A (where player 2 moves first), or Matching ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate