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Author Question: How can a consumer's demand for a good be derived using indifference curve analysis? What will be ... (Read 114 times)

imowrer

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How can a consumer's demand for a good be derived using indifference curve analysis?
 
  What will be an ideal response?

Question 2

If a consumer has a choice between only two goods and both of them are perfect complements what would the indifference curve look like and why?
 
  What will be an ideal response?



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dominiqueenicolee

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Answer to Question 1

As the price of a good changes the consumer's budget constraint changes. Thus, it is possible to see how the consumer changes his utility-maximizing choice. This will give us his new quantity demanded at each price.

Answer to Question 2

The indifference curves would be L-shaped. The reasoning is that one good must be accompanied by the other good in order to give the first any utility. Having more of the second good however, doesn't make the person any better off.





 

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