Microeconomics
Microeconomics
5th Edition
ISBN: 9781319098780
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
Question
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Chapter 10A, Problem 1P
To determine

To draw:

A diagram containing, three of Isabella’s indifference curve for the following situations.

Concept Introductions:

Indifference curve: The indifference curve is a line showing all possible combinations of two goods which give the consumers equal satisfaction. In other words the consumer would be indifferent in these points.

Expert Solution & Answer
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Explanation of Solution

Microeconomics, Chapter 10A, Problem 1P , additional homework tip  1

  1. If we Isabella want four tires for one car her indifference curve will look like the above given graph.
  2. Microeconomics, Chapter 10A, Problem 1P , additional homework tip  2

  3. In this situation the indifference curves for Isabella will be downward sloping as shown in the above graph
  4. Microeconomics, Chapter 10A, Problem 1P , additional homework tip  3

  5. In this situation the indifference curve for Isabella will be convex to the origin. This type of indifference curves is normal.
  6. Microeconomics, Chapter 10A, Problem 1P , additional homework tip  4

  7. The indifference curve for the bindings and skis for Isabella is shown in the above graph.
  8. Microeconomics, Chapter 10A, Problem 1P , additional homework tip  5

  9. Isabella’s indifference curve for water and soda are given above in the, in this case the indifference curve will be a vertical one.

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