Demands for bananas and apples exchange strategy

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Reference no: EM131808500

Ann is initially endowed with 30 bananas and 30 apples. 1. Assume pp23. Write down Ann's budget constraint and plot it in the aphal baea or which Aa i bryi, the apples and selling bananas, and all bundles for which Ann is selling the apples and buying bananas. 2. Assume U(?1,22) z1z2 where zi denotes bananas and z2 denotes ap- analytically (it means, calculate it) and find the MRS. Plot the indifference curve and the budget line in the corresponding diagram. 3. Now assume P2-2 and find the optimal choices of Ann for P1-1, P1 = 2,P1 = 3, Determine the corresponding net demands for bananas and apples exchange strategy comparing the MRS at her endowment point with the relative price

Reference no: EM131808500

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