Question

For Maahir, shampoo (S) and conditioner (C) are perfect complements. He uses 1 pump of shampoo and 1 pump of conditioner every time he washes his hair. a. What do Maahir's indifference curves for shampoo and conditioner look like? They are concave to the origin. They are L-shaped. They are linear. They are typical indifference curves that are convex to the origin. b. Assume that shampoo costs $0.40 per pump and conditioner costs $0.20 per pump. If Maahir's budget for shampoo and conditioner is $12, use the space below to write the equation for his budget constraint. In your equation, use S for shampoo and C for conditioner. You must use capital letters for S and C within the budget constraint, else your answer will be marked as incorrect.

Answer 1

Answer:

a. What do Maahir's indifference curves for shampoo and conditioner look like?

• They are L-shaped.

When two goods are perfect complements, their indifference curve will be L-shaped. When two goods are perfect substitutes, their indifference curve will be a straight line with a -1 slope.

b. Assume that shampoo costs $0.40 per pump and conditioner costs $0.20 per pump. If Maahir's budget for shampoo and conditioner is $12, use the space below to write the equation for his budget constraint.

0.4S + 0.2C = 12

S = C

the optimal bundle = 12 / 0.6 = 20 pumps of shampoo and 20 pumps of conditioner

Explanation: