Question

Utility Maximizing Consumption Exercise 3 The graph below depicts a set of indifference curves and budget line for Samuel. Use the graph to answer the questions that follow. Samuel's Entertainment Preferences w Concerts BU 8 10 12 14 16 18 20 22 0 2 4 6 Dining Out

Answer 1

@ Which of the following Bundles are affaidahle? Bundle W: NOT affordable Bundle T : NOT affordable : Bundle 5: AFFORDA BLE Bundle 4: NOT Affordable What is the of himal Bundle of for Samuel ? i 4 times dinning out and [4 concentrs © © Which of the following Bundle are affordable tender Ry? Bundle 2 : NOT affordable • Bundle R: NOT affordable Bundle w: NOT affidable- • Bundle Y: AFFORDABLE · Bundle vi AFFORDARLE Based on samuel's New enfelfainment Budget, What is the optimal Bundle for Samuel 1 10 finces of inning out and 17 concert # Reasons Affordable Bundle are the Brendle in which IC and Budget cine are making tangents. The Budget line is no affeable point in all He: