Consider three consumers, Jonathan, and Caitlin. Each consumer likes to drink martinis... real martinis, made with...

Consider three consumers, Jonathan, and Caitlin. Each consumer likes to drink martinis... real martinis, made with gin and vermouth, not these goofy things with apple brandy and pink things in them.

 Each consumer has very specific preferences, as stated below

.Jonathan likes his martinis with 3 parts gin to 1 part vermouth and likes no other combination.

Caitlin mostly just likes something to drink. But she likes vermouth better than gin, so she is always willing to substitute 2 gin for 1 vermouth.

Assume that each consumer has a weekly budget of $80, the price of gin is $1 and the price of vermouth is $1.

On the graphs below, draw a representative set of indifference curves for each consumer (that is, draw AT LEAST two indifference curves for each consumer). Indicate the current utility-maximizing point for each consumer, and label everything carefully, including intercepts and slopes.

Expert Solution

Rahul Sunny answered 1 year ago

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Consider three consumers, Jonathan, and Caitlin. Each consumer likes to drink martinis... real martinis, made with...

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