How many cups of tea and coffee will jane consume describe

Reference no: EM13391201

Jane derives utility only from her caffeine intake. She can consume coffee or tea, and a cup of coffee contains four times as much caffeine as a cup of tea.

(a) Draw a graph containing Jane's indifference curves, and explain how you obtained them. Be sure to label and number the axes of your diagram.

(b) Suppose Jane's income is $10. The price of tea is $0.50/cup, and the price of coffee is $1/cup. Write the equation for Jane's budget constraint. On the same grap h as in part (a), draw Jane's budget constraint.

Reference no: EM13391201

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