View the step-by-step solution to:


The only goods you consume are eggs and wine. On Monday, you consume basket M. On Tuesday, the price of eggs goes

down and you consume basket T. On Wednesday, the price of eggs returns to its Monday level and the price of wine goes down. On Wednesday, you consume basket W and you are exactly as happy as you were on Tuesday. You choose to consume more eggs on Wednesday than on Monday.

8 Draw in a diagram (measuring quantity of eggs on the horizontal axis) the budget lines for Monday. Tuesday and Wednesday, along with the points M, T, and W.

9 How does your diagram show that on Wednesday you are exactly as happy as you were on Tuesday?

10 True or False: On Wednesday you consume less eggs than on Tuesday. Justify your answer.

11 True or False: Eggs cannot possibly be a Giffen good. Justify your answer.

12 Can you say whether eggs is a normal or inferior good?

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes