Question

1. Hessah spends a total of a 100 KD each month on two desserts: chocolate chip cookies and vanilla ice cream. Let C

and Pc denote the quantity and price of chocolate chip cookies she consumes, respectively. Let V and

Py denote the quantity and price of vanilla ice cream cups she consumes, respectively. The table below shows

Hessah's optimal baskets as the price of vanilla ice cream changes.

a. Sketch Hessha's price-consumption curve for vanilla ice cream on any of the attached graph papers. Label

her optimal baskets. Place the quantity of vanilla ice cream cups on the horizontal axis and the quantity of

chocolate chip cookies on the vertical axis.

b. Sketch Hessha's demand curve for vanilla ice cream on any of the attached graph papers.

C. Sketch the Engel curve for vanilla ice cream on any of the attached graph papers.

d. Comment on whether vanilla ice cream is a normal or an inferior good. Explain your answer.

e. Sketch the Engel curve for cookies on any of the attached graph papers.

f. Comment on whether cookies are normal or inferior goods. Explain your answer.

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