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microeconomics

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When deriving an individuals demand curve how do you find the optimal bundle if you are only given: price of 2 goods and income.

i.e-

price of wine: $35
price of beer: $12
Income= $419

  • microeconomics - ,

    Make a graph. On the horizontal axis, it is beer. It goes from zero to 40. Mark the point 419/12. That is the maximum number of beer.
    On the vertical axis, wine, it goes from zero to 15. mark the point 419/35, that is max wine.

    Connect the two points with a line. The optimal will be on that line.

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