Indifference Curves

MAE 201 naming 2 Question 1 A) Diagram 1 : Indifference Map for doyen portion I : Too such(prenominal) wine â€" above 20 metre of Gelato does non exceed the 45 mark Region II : lavishness amount of both products Region III : Too lots gelato â€" above 45 Wine not exceeding 20 Region IV : Both products in acceptable amounts (usual case) Utility Level be from Highest to Lowest Region IV Region III and Region I Region II If he does not like excessive amounts of either goods, the highest public utility company level would be at region IV of the indifference correspond shown above. The indifference curve in region IV shows that each combination of goods provide the same utility, so Dean does not mind giving up wine for gelato or iniquity versa. In this region, both goods are consumed at an acceptable amount. Therefore, utility is highest at this region. In region I, there is too much wine at any point of the indifference curve. Therefore, Dean is willing to give up more wine for less(prenominal) gelato.

b)Diagram 2 : work out Line for Dean Diagram 3 : Budget Line Incorporated into Indifference Curve The point where the budget crinkle is the tangent of the indifference curve is the optimal consumption roll up for Dean. C) Diagram 4 : Optimal Consumption Bundle afterward Increase in Income to $500 If Deans income increases to $500 from $100, he can now afford any combination amongst 50 wine and 0 gelato and 0 wine Is this the duty essay for you? Watch the video below to read 2 more pages now. or If you want to get a undecomposed essay, order it on our website: Ordercustompaper.com

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