Draw a budget constraint and indifference curves

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Draw a budget constraint and indifference curves with consumption bundles that demonstrate the following:

a. Consumption bundle A and consumption bundle B bring the same level of utility. The consumer can afford consumption bundle A, but not consumption bundle B.

b. Consumption bundle C is preferred to consumption bundle A. Consumption bundle C costs exactly as much as the consumer has budgeted, but does not maximize utility.

c. The consumer will maximize their level of utility from consumption bundle D.

d. The consumer prefers consumption bundle E to consumption bundle D, but cannot afford it.

Reference no: EM132492583

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