Problem
1. Draw some hypothetical indifference curves for John Q. Public on a diagram identical to the one you constructed for Test Yourself Question 1.
a. Approximately how much gasoline and how many hot dogs will Mr. Public buy?
b. How will these choices change if his income increases to $140? Is either good an inferior good? c. How will these choices change if gasoline price rises to $3.00 per gallon?
2. Explain the information that the slope of an indifference curve conveys about a consumer's preferences. Use this relationship to explain the typical U-shaped curvature of indifference curves.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.