Use the following scenario to make a graphical optimization. Label EVERYTHING thoroughly. -Consider the following scenar

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Use The Following Scenario To Make A Graphical Optimization Label Everything Thoroughly Consider The Following Scenar 1 (51.45 KiB) Viewed 36 times

Use the following scenario to make a graphical optimization. Label EVERYTHING thoroughly. -Consider the following scenario for two goods, OHOP Pizza (the only place you ever eat out) on the X- Axis and Casino Nights (your "fun night out" you would welcome doing as much as you can afford) on the Y-Axis. -Your fun budget is $2000 for the upcoming academic year. The price of a OHOP Pizza is $12 and the price of a night at the casino is roughly $60 (avg net loss...they always win in the end! And drink expenses). a. Draw an initial budget constraint (BCo) with the optimal bundle being three OHop Pizza per month and the remaining budget on Casino Nights. Label this point O b. If the price of OHOP Pizza decreases to $8 if you buy them on Wednesdays, draw this new budget constraint. C. Based on the outcomes from your initial Indifference curve for the base scenario, identify what would be your new consumption bundle is OHOP Pizza was an NORMAL good to you. Label one (of many possible) situations where both OHOP and Casino Nights are NORMAL goods as Point N. d. If another consumer faced the same budgets and outcomes viewed OHOP Pizza as an INFERIOR good, what is the RANGE to which their new optimal outcome could be on BC2 for both goods would reflect that. Label this specific Range clearly (highlight for instance). **Draw BIG and label THOROUGHLY