Explain why the consumer is likely to be worse off

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Draw a budget line and then draw an indifference curve to illustrate the satisfaction-maximizing choice associated with two products. Use your graph to answer the following questions.

a. Suppose that one of the products is rationed. Explain why the consumer is likely to be worse off.

b. Suppose that the price of one of the products is fixed at a level below the current price. As a result, the consumer is not able to purchase as much as shewould like. Can you tell if the consumer is better off or worse off?

Reference no: EM13902421

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