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Kinked Utility / Indifference Curve

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Carol consumes two goods, x and y, with respective price p_x and p_y. Carol's utility function is given by u(x,y)=Min{2x+y,2y}. Carol's income is 84

On a diagram where the horizontal axis indicate the number of x and the vertical axis indicate the number of y, draw Carols's indifference curves for utility levels 30 and 40, label them as IC_30 and IC_40, respectively. On your graph, label the kink point of IC_30 bundle A and label the kink point of IC_40 as bundle B. What are the coordinates of A and B?

I would also like to be taught how to write the equation of the line that passes through all kink points please.

I'm unsure about how to draw the graph so I don't know how to obtain the values of the coordinates and would like to know how to get the equation. Your help is greatly appreciated.

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Solution Summary

The expert will show how to graph and calculate a kinked indifference curve.

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See attached excel file.

To answer your question, since the utility function ...

Solution provided by:
Robert Reinhart, MBA
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  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
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