1. Business
  2. Economics
  3. 4 assume your budget is 30 and the price of...

Question: 4 assume your budget is 30 and the price of...

Question details

4. Assume your budget is $30 and the price of goods A and B are $5/unit for A and $3/ unit for B. a On the following graph, graph your budget constraint and mark the optimal consumption point. Mark this original budget constraint. Assume your budget increases to $45, correctly mark and draw your new budget constraint. c. Assume your budgct decreases to $15, correctly mark and draw your new budget d. Correctly draw in your income expansion path e. Is Good A an inferior or normal good? Is Good B an inferior or normal good? Why? f DO NOT ANSWER here, but be sure to know what inferior and normal goods are. Understand the Engel curve 10 8 7 0 1 2 3 4567 8 9 10 11 12 13 14 15 16 Good B
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution