Samantha earns a weekly income of $6000. Suppose she wishes to spend this income on two...

Samantha earns a weekly income of $6000. Suppose she wishes to spend this income on two goods books and dresses only. A book costs $200 while a dress costs $600.

i. Draw Samantha’s budget line. Putting books on the Y axis.

ii. Suppose her income increases to $9000 per week, illustrate what happens to her budget line.

iii. Suppose the price of books increase to $600, while her income and the price of dresses is unchanged. Illustrate what happens to her budget line.

List and explain three properties of indifference curves.

Expert Solution

Rahul Sunny answered 4 months ago

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