Illustrate budget constraint and optimal bundle, Macroeconomics

Assignment Help:

Danny is an investment banker and has income I = 300. When prices are px = 10 and

py = 20, Danny consumes the bundle (x; y) = (6; 12).

1. Illustrate Danny's budget constraint and optimal bundle.

2. Suppose that prices change to px = 20 and py = 10. Draw Danny's new budget constraint on the same set of axes as his original budget constraint.

3. Danny is a smart guy and always makes utility maximizing choices. According to revealed preference, which bundles on his new budget constraint will he definitely not consume?

 


Related Discussions:- Illustrate budget constraint and optimal bundle

Trade cycle, discus the various measures that may be taken by a firm to cou...

discus the various measures that may be taken by a firm to counteract the evil effect of a trade cycle

Potato chip industry in the northwest, In 2007, the potato chip industry in...

In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competi

Estimate kilograms of lobster must he catch per day, A lobster catcher spen...

A lobster catcher spends $12 500 per month to maintain a lobster boat.  He plans to catch an average of 20 days per month during lobster season.  For each day, he must allow approx

Define the labor market, Q. Define the Labor Market? A significant macr...

Q. Define the Labor Market? A significant macroeconomic variable is the total amount of labor which is used in a certain time period. Amount of labor and amount of capital are

How internal resources important, Why is it important to study the internal...

Why is it important to study the internal resources, capabilities, and activities of firms? What insights can be gained?

Review of economic literature, The project has been split into four main ch...

The project has been split into four main chapters; literature review, data and methodology, results and a conclusion. The appendix contains the estimated tables and graphs, of whi

What is use of long-run average total cost curve in output, What is the use...

What is the use of long-run average total cost curve in the producing output? The long-run average total cost curve demonstrates the relationship in between output and average t

National income, what are the advantages and disadvantages of a national in...

what are the advantages and disadvantages of a national income and green GDP? national income figures are often used to compare living standards across countries and through time.

Combination, take one set ( lk& output) to prove

take one set ( lk& output) to prove

Variables are discrete, Which of these variables are discrete and which are...

Which of these variables are discrete and which are continuous random variables? a) The number of new accounts established by a salesperson in a year. b) The time between customer

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd