Draw a set of indifference curves for ashlee

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Reference no: EM133439354

Question: For Bachelorette Ashlee, shampoo and conditioner are perfect complements. She likes to use 1 squirt of shampoo and 1 squirt of conditioner each time she washes her hair.

Draw a set of indifference curves for Ashlee that illustrate the utility she derives from using shampoo and conditioner.

Assume that shampoo costs $4 and conditioner costs $2. Construct a budget constraint for Ashlee and describe her purchasing habits. What is her optimal bundle likely to look like? (Hint: Assume some level of income

for Ashlee.)
c. Suppose that prices change so that shampoo costs $2 and conditioner costs

$4. What is likely to happen to Ashlee's optimal bundle as a result?

Explain.d. How would you answer to (c) change if Ashlee used 2 squirts of shampoo and 1 squirt of conditioner each time she washed her hair?

Reference no: EM133439354

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