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Economics Homework Four - Model (view source)
Revision as of 20:57, October 11, 2009
, 20:57, October 11, 2009added two
11. Discuss the Irish Potato Famine between 1846 and 1849, and whether you think potatoes were an "inferior good" then.
11. Discuss the Irish Potato Famine between 1846 and 1849, and whether you think potatoes were an "inferior good" then.
:... Yes, I believe they were. Why? Because an inferior good is a good that can be substituted in when another good becomes too expensive [due to a decrease in income]. The potatoes in Ireland can be considered inferior goods because they were the cheapest possible food available in the country. The people lived on potatoes; breakfast, lunch and dinner would be some for of baked potatoes. Potatoes were also the easiest crops to grow. ... (Kathleen)
== Extra Credit for Anyone ==
== Extra Credit for Anyone ==
12. Explain whether goods X or Y are perfect substitutes or complements or something else for the indifference curves below, and why:
12. Explain whether goods X or Y are perfect substitutes or complements or something else for the indifference curves below, and why:
[[File:IndifferenceCurve2.gif|550px]]
[[File:IndifferenceCurve2.gif|550px]]
:They are perfect complements. The indifference curve shows that even if you have 5 extra of "good Y" you still remain indifferent because the good is not useful without the same amount of "good X." (Kathleen)