** Subscribe** to view the full document.

**Unformatted text preview: **e) Why is the supply curve you found in d) upward sloping? Explain. 2. Andy has income of $10 he spends it on beef and apple. A pound of beef costs $5 and a pound of apples costs $2. a) Draw his budget constraint, clearly labeling intercepts and slope. b) Depict reasonable indifference curves for Andy. List two properties that these curves should satisfy, and explain them. c) Using your answers in a) and b), find his optimal consumption plan. Show your answer graphically. d) Get two points on Andy’s demand curve for apple. Explain how you found them. e) Suppose Andy became a vegetarian. Depict his new indifference curves and find his new optimal consumption plan....

View
Full Document

- Summer '11
- BrianPhelan
- Microeconomics, Supply And Demand, Andy, Economics curves, optimal consumption plan