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Budget Lines/Indifference Curves

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A consumer decides not to buy a DVD player when her income is $20,000. However, when her income rised to $30,000, she decides to buy one. In a single diagram, draw the budget lines and indifference curves to illustrate this situation (assume the DVD costs $300 in both time periods). Be sure to label the diagram completely. Hint: Place DVD players on the horizontal axis and "other goods" on the vertical axis.

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The solution determines the budget lines/indifference curves.

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A consumer decides not to buy a DVD player when her income is $20,000. However, ...

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