I need the answer as soon as possible 29. Which one is not a assumption of thetheory of demand based on analysisof indifference curves?A. O Given scale of preferences as betweendifferent combinations of two goodsВ.Diminishing marginal rate ofsubstitutionC. O Constant marginal utility of moneyD. O Consumers would always prefer moreof a particular good to less of it, otherthings remaining the same

Indifference Curve Analysis Assumptions:- (1) In order to achieve maximum satisfaction, the customer…

29. Which one is not a assumption of the theory of demand based on analysis of indifference curves? A. O Given scale of preferences as between different combinations of two goods B. O Diminishing marginal rate of substitution C. O Constant marginal utility of money D. O Consumers would always prefer more of a particular good to less of it, other things remaining the same

29. Which one is not a assumption of the theory of demand based on analysis of indifference curves? A. O Given scale of preferences as between different combinations of two goods B. O Diminishing marginal rate of substitution C. O Constant marginal utility of money D. O Consumers would always prefer more of a particular good to less of it, other things remaining the same

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.9P

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Would you expect total utility to rise or fall with additional consumption of a good? Why?
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
Explain why individuals make Choices that are directly on the budget constraint, rather than inside the budget constraint DI outside it.
Who determines how much utility an individual will receive from consuming a good?
Is it possible for total utility to increase while marginal utility diminishes? Explain.