10. Using the Indifference Curve Approach
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10. [Using the Indifference Curve Approach] 13. [Using the Indifference Curve Approach] a.
The original equilibrium is at point A.
b. The new budget line is BL2. The new tangency must occur at a point with MORE THAN 25 pounds of potatoes, for instance, at point B. If potatoes are inferior, then Cameron will consume more potatoes and fewer steaks than at his original position.
14. [Using the Indifference Curve Approach]
a.
The original equilibrium is at point A.
b. The new budget line is BL2. The new tangency must occur at a point where Rafaella is consuming MORE THAN 4 pounds of chicken, and LESS than 10 eggs, for instance, at point B.
15. [Using the Indifference Curve Approach]
a.
The original equilibrium is at point A.
b. A new tangency will occur at a point where she consumes more clothes and less food, such as point B.
c. A new tangency will occur at a point where she consumes fewer clothes and more food, such as point C. A new tangency will occur at a point where she consumes fewer clothes and more food, such as point C.