Above you see three indifference curves and a budget

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Above you see three indifference curves and a budget line. Answer the following questions.

2235_Find the slope of the budget line.png

a. If this consumer's budget (or income) is $600 what is the price of Good A?

b. If this consumer's budget (or income) is $600 what is the price of Good B?

c. What is the slope of the budget line? Does this change depending on which combination of goods is purchased?

d. At the point of consumer equilibrium what is the marginal rate of substitution?

e. If the price of Good A increases by 50% from its original price which indifference curve will this consumer end up on? Will the consumer be buying more of Good Y, more of Good X, or more of both goods?

f. If the price of Good B decreases 40% from its original price which indifference curve will this consumer end up on?

Reference no: EM13376091

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