Illustrate budget constraint and optimal bundle, Macroeconomics

Danny is an investment banker and has income I = 300. When prices are px = 10 and

py = 20, Danny consumes the bundle (x; y) = (6; 12).

1. Illustrate Danny's budget constraint and optimal bundle.

2. Suppose that prices change to px = 20 and py = 10. Draw Danny's new budget constraint on the same set of axes as his original budget constraint.

3. Danny is a smart guy and always makes utility maximizing choices. According to revealed preference, which bundles on his new budget constraint will he definitely not consume?

 

Posted Date: 3/1/2013 6:45:41 AM | Location : United States







Related Discussions:- Illustrate budget constraint and optimal bundle, Assignment Help, Ask Question on Illustrate budget constraint and optimal bundle, Get Answer, Expert's Help, Illustrate budget constraint and optimal bundle Discussions

Write discussion on Illustrate budget constraint and optimal bundle
Your posts are moderated
Related Questions

according to the Keynesian model, the short-run aggregate supply curve is horizontal when: A: there are unemployed resources and prices do not fall when aggregate demands falls. B:

Capitalism is the dominant, most used form of government there is in the globe today. Presently, over 80% of countries use capitalism and a free market economy.

The Transmission Mechanism The mechanism by which the changes in monetary policy affect aggregate demand is called 'transmission mechanism'. Two stages in transmission mechanis

Gasoline, insurance, depreciation, and repairs are all costs of owning a car. Which of these can be considered opportunity costs in the context of each of the following decisions?

what reasons limit the bargaining power of trade union in developing countries

Discuss what policy changes he might be likely to propose with respect the issue that you identified as one about which he might be concerned.

A budget deficit is defined as: A. accumulated surpluses minus accumulated deficits. B. a shortfall of revenues compared to expenditures. C. accumulated deficits minus accumulated

Suppose the inverse demand curve for a market is equal to p = 100 -- 0.3Q. The inverse market supply curve is p = 20 + 0.5Q. 1. Calculate the equilibrium price and quantity;

Camping at Wilson's Promontory, a national park in Victoria, isn't free, but for many years now not everyone who wants to camp at Wilson's Promontory during the Christmas holidays