4. Indifference Curve and Budget Line Annie has an income of $160 an hour. Popcorn costs $5 a bag, and costs $4 a six-pack of energy drink A). Draw a graph of Annie's budget line with six-pack of energy drink on the x- axis, and popcorn on the y-axis. b.) If we know that Annie maximizes her utility with the purchase of 20 bags of popcorn, how many six-pack energy drink she will purchase? (an estimate from your graph & actual calculation), draw an indifference curve reflecting this optimum.

4. Indifference Curve and Budget Line Annie has an income of $160 an hour. Popcorn costs $5 a bag, and costs $4 a six-pack of energy drink A). Draw a graph of Annie's budget line with six-pack of energy drink on the x- axis, and popcorn on the y-axis. b.) If we know that Annie maximizes her utility with the purchase of 20 bags of popcorn, how many six-pack energy drink she will purchase? (an estimate from your graph & actual calculation), draw an indifference curve reflecting this optimum.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 4SQP

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4. A consumer uses all her available income to buy food and gasoline. Her indifference curve and budget constraint are shown in the diagram below. At point A, the marginal utility per dollar spent on food is the marginal utility per dollar spent on gasoline. gasoline A IC food a. greater than b. less than c. equal to 5. Megan is currently spending her entire candy budget. According to her preferences, you could take away up to 5 candy bars if you give her 3 bags of sour patch kids without changing her utility. The price of a candy bar is $0.75 and the price of a bag of sour patch kids is $1.50. Is Megan maximizing her utility? If not, how should she change her consumption bundle? a. No, she should buy more candy bars and fewer bags of sour patch kids. b. No, she should buy more bags of sour patch kids and fewer candy bars. c. No, she should buy more bags of sour patch kids and more candy bars. d. No, she should buy fewer bags of sour patch kids and fewer candy bars. e. Yes, she is…
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