Draw the consumer’s budget constraint and indicate the consumer’s optimal bundle on the budget constraint. Make...

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Draw the consumer’s budget constraint and indicate the consumer’s optimal bundle on the budget constraint. Make sure your graph is accurate and clearly labeled.

c) U(X,Y) 2X +3Y. The consumer has $20 to spend and the prices of the goods are Px $2 and Py $4.

business economics

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Answer 1

Answer #1

See diagram in the pic attached here.

Euuaetion of budat canhound Is 0 Ic-

Note that slope of budget line is - Px/Py = - 1/2 and slope of Indifference curve is MRS=-2/3 .So, IC is steeper than budget line

If you have any doubt feel free to ask.

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Answer 2

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Draw the consumer’s budget constraint and indicate the consumer’s optimal bundle on the budget constraint. Make...

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Draw the consumer’s budget constraint and indicate the consumer’s optimal bundle on the budget constraint. Make...