Khandro is a buddhist, for whom “more goods X and Y is better” until her basic...
Khandro is a buddhist, for whom “more goods X and
Y is better” until her basic needs are met. After that
point, since there is no free disposal, more goods X
and Y interferes with her spiritual meditation and
makes her worse off. Draw Khandro’s indifference
map for goods X and Y .
Homework Answers
Given that for Khandro both of good X and Y are better, hence both the goods are normal goods and the indifference curve is downward sloping curve convex to the origin.
After a certain point, since the goods interfere with her spiritual meditation, both X and Y become "bad" for her and the shape of her indifference curve changes. It is now concave to the origin.
The increase in utility is depicted by the arrows - rightward arrows for the good-good case and leftward/inward arrows for the bad-bad case.
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