Posted by please help! on Monday, October 6, 2008 at 7:28am.
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  bobpursley, Monday, October 6, 2008 at 8:04am
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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