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7 February, 08:37

Robert only consumes X and Y, and his indifference curves have the usual convex shape. Consider the consumption bundles (3, 9), (6, 6), and (9, 3) (Hint: The consumption bundles completely exhaust Robert's income). If Robert is indifferent between (3, 9) and (9, 3), then:

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  1. 7 February, 08:39
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    Answer: Then consumption bundle (3,9) and (9,3) will lie on the same indifference curve.

    Since his consumption bundles completely exhaust his income, therefore the indifference curve will be tangential to the budget constraint.

    Explanation:

    Given : Robert only consumes X and Y, and his indifference curves have the usual convex shape.

    Consumption Bundles (3, 9), (6, 6), and (9, 3).

    If Robert is indifferent between (3, 9) and (9, 3), then: consumption bundle (3,9) and (9,3) will lie on the same indifference curve.

    Also, since his consumption bundles completely exhaust his income, therefore the indifference curve will be tangential to the budget constraint.
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