Mongkut lives on a farm. On his farm, he grows vegetables and raises animals to be used for meat. He consumes some of his output and trades the rest….

1. Mongkut lives on a farm. On his farm, he grows vegetables and raises animals to be used for meat. He consumes some of his output and trades the rest. In the current period his farm yielded 30 kg of vegetables and 10 kg of meat. For Mongkut, and his trading partners in the nearby villages, types of meat are perfect substitutes for each other, and types of vegetables ae perfect substitutes with each other. Currently, both 1kg of mixed vegetables and 1kg of mixed meats are priced at 5 units of the local currency.

(a) What is the value of Mongkut’s endowment? Show his budget constraint.

(b) Mongkut has his own ideas about the meaning of a ‘balanced’ diet and will only eat vegetables and meat in a 1:1 ratio. What are the quantities in his optimal bundle? What are his net demands? Illustrate his preferences and optimal choice.

(c) Imagine that before Mongkut got to trade, the price of meat increased to 15 while the price of vegetables stayed at 5. How would this effect his gross and net demands? Illustrate.

(d) What is the size of the substitution effect on the demand for meat? The ordinary income effect? The endowment income effect?

(e) How would this case be different if Mongkut was always happy to swap 1 kg of vegetables for 1 kg of meat in consumption?

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10