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Unformatted text preview: bend of the indifference curves. This results in indifference curves like this: Indifference Curves for Substitute Goods: Cola Tina's Budget Constraint If we know her indifference curves, we can draw her budget constraint in with them on the same graph. After that, it is simply a matter of finding the outermost indifference curve that is tangent to (just barely touches) her budget constraint, and use this tangent point as her optimal combination of wine and glasses. In this case, it is the second indifference curve that optimizes her utility given her budget....
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This note was uploaded on 02/09/2012 for the course ECO ECO2013 taught by Professor Jominy during the Fall '08 term at Broward College.
- Fall '08