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Filbert and Lychee have convex indifference curves. Note Filbert is indifferent between baskets (3, 2) and (4, 1)--these are x, y coordinates. Lychee is indifferent between baskets (1, 4) and (2, 3) Not that all four baskets lie along a straight line.
a.) Can you determine whether Filbert and Lychee have identical tastes?
b.) Suppose that Filbert chooses (4,1) and Lychee chooses basket (1, 4). Can you determine whether Filbert and Lychee pay identical prices for the goods they buy?
Explaining balance of payments: First, with the second oil shock of 1979-80 and doubling of India's import bill along with dismal export performance as result of severe
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Sims (1980) introduced an exciting and ground-breaking new framework which would prove to be extremely insightful for macroeconomic analysis. This is known as vector autoregression
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