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Jack will only consume toast and honey together in fixed proportions In particular he likes to consume 1 costs €050 per portion slice of toast with 1 portion of honey Suppose toast costs

 Jack will only consume toast and honey together in fixed proportions. In particular he likes to consume 1 costs €0.50 per portion slice of toast with 1 portion of honey. Suppose toast costs ?2 per slice and honey and Jack has ?10 to spend. (a) Draw Jacks budget constraint. (b) Using w hat you know about Jacks preferences what will his optimal bundle be, assuming Jack wants to maximize utilitv (c) Draw the indifference map with his budget constraint and illustrate the optimal point.

Apr 06 2020 View more View Less

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