Answer to Question #142333 in Finance for Mr. Dinesh Pal Singh

Question #142333
43. Assume that the budget constraint is given by the equation Q1 = 1,000 – 5Q2, where Q1 and Q2 represent quantities of two goods. Normally, indifference curves are convex to the origin, but assume in this case that they are linear with a constant slope of –2.
i) Graph the budget constraint (with Q1 on the vertical axis).
ii) Draw in a set of indifference curves and label the utility-maximizing point.
iii) Where would the utility-maximizing point have been if the indifference curves had a constant slope of –6?
1
Expert's answer
2020-11-10T07:24:36-0500

i)


ii)



iii)

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