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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 58 times)

imowrer

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on: Jun 29, 2018
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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Reply #1 on: Jun 29, 2018
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.


imowrer

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Reply #2 on: Jun 29, 2018
Thank you


dominiqueenicolee

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Reply #3 on: Jun 29, 2018
No problemo


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