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Indifference Curve and Budget Line Annie has an income of $180 an hour. Popcorn costs $4...

  1. Indifference Curve and Budget Line

Annie has an income of $180 an hour. Popcorn costs $4 a bag, and costs $6 a six-pack of energy drink

  1. Draw a graph of Annie’s budget line with six-pack of energy drink on the x-axis, and popcorn on the y-axis.
  2. What is the slope of Annie’s budget line (1%)? What could this slope be also called?
  3. If we know that Annie maximizes her utility with the purchase of 30 bags of popcorn, how many six-pack energy drink she will purchase?-(an estimate from a graph), draw an indifference curve reflecting this optimum.
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Answer #1

Jnome (m) Pasivx 180 dunk epcomP) Co CIndiference aun 30 Bc Drink (D) Enugiy O30) 30 10 1.S PP dank sin- pack tnis ppotunity

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