4- An indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. Food B Clothing a) Danyal is obsessed with food and clothes. Assume you have no knowledge of the budget line, what point would Danyal prefer to be at. b) Why can't two indifference curves not intersect, explain and illustrate your answer. c) As we move from point c to f. who's marginal rate of substitution declines.

Q: 7. Mr Kabelo has R1000 to spend on meat and rice. The price of meat is R250 per portion while that…

A: Note: Since you have asked more than one individual questions, we are going to answer the first…

Q: 1. What is the difference between ordinal utility and cardinal utility? Explain why the assumption…

A: Note:  We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: 3. Income and substitution effects Dina has a so-called fruit budget, which she uses to buy only…

A: Dina only buys apricots and nectarines.

Q: 4. We learned that the slope of the indifference curve is called the marginal rate of substitution…

A: The answer is as follows:-

Q: 2. What is the economic interpretation of the condition that the consumer at his optimum equates his…

A: An indifference curve refers to the combination of two goods that gives an equal satisfaction to the…

Q: 8. Suppose that you are able to consume only two goods, coffee and donuts. Use a graphical and…

A: The consumer is in equilibrium when he gets maximum satisfaction out of his expenditure. When the…

Q: Economics 1. Imagine you have $1000 of income to spend on two goods, x1 and x2. ASSUME BOTH AR…

A: Income = 1000 Price of x2 = 20 Price of x1 in case 1 Px1 = 40 case 2  = 20 case 3 = 10

Q: 1. Assume that when the price of X decreases the consumption of Y remains the same. Draw the…

A: Answer -

Q: 9) If indifference curves are concave to the origin, then at equilibrium: A) The indifference curve…

A: Indifference curve is the locus of different combination of two goods that a consumer can consume…

Q: 11. The limit on the consumption bundles that a consumer can afford is known as: a. An indifference…

A: All the bundles of goods and services that a consumer can purchase at the given prices, given his…

Q: 29. Which one is not a assumption of the theory of demand based on analysis of indifference curves?…

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

Q: The law of diminishing marginal utility implies that... a. Total utility is constant as more units…

A: The law of diminishing marginal utility implies that as more and more units are consumed of a good,…

Q: 11. Suppose an individual has a daily income of Rs. 1,500 and spends it to consume commodities X and…

A: Income of the individual = 1500 Price of X = 75 Price of Y = 50

Q: 8. Explain consumer equilibrium in both the utility approach as well as the indifference approach.…

A: One Commodity Equilibrium: When a buyer buys a commodity, he stops when the price and utility are…

Q: 23. A consumer chooses an optimal consumption point were the a. marginal rate of substitution is…

A: The point/place at which the consumption is optimal is wherein the slopes of the IC and that of its…

Q: P Question 1 Anand has $100 to spend on apples and/or avocados. Suppose you have drawn his budget…

A: Correct answer "none of the above".

Q: 13) An indifference curve is related to which of the following? A) Choices and preferences of…

A: The theory of utility maximization says that every individual focuses on utility maximization. This…

Q: 9. Suppose the price of X is $5 and the price of Y is $10 and a hypo- thetical household has $500 to…

A: The budget constraint is the limit of the open door set — all potential blends of utilization that…

Q: - Demand theory: A. From the indifference curve/budget constraint diagram, derive the individual's…

A: Demand Theory refers to an economic principle regarding to the relationship between consumer demand…

Q: a) Are the preferences represented by the above utility function monotonic?   b) Graph a…

A: Answer (a)   The monotonic function is that function which either always increases or decreases.…

Q: Calculating the marginal rate of substitution (MRS). Crystal enjoys eating muffins and scones. The…

A: At point A; U(X,Y)=U(10,70)  At point B; U(X,Y)= U(15,45)  MRS=Change in good YChange in good X…

Q: Illustrate and explain how consumer equilibrium is achieved using the indifference curve? Discuss…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Using Figure 4 , explain why the point of tangency of the budget line with an indifference curve is…

A: A budget line (m) shows all possible combinations of two goods that can be bought with provided…

Q: 7- Define the budget constraint and what does the slope of the budget constraint represent?

A: In Economics, budget is defined as a spending plan which is based upon the income and expenses of a…

Q: please show all calculations Draw a budget line with good X on the x-axis and Good Y on the Y axis.…

A: The income effect happens when a price change affects a consumer's real income, whereas the…

Q: #10. Assume that Thomas can afford to buy as many candy bars and ice cream cones as he wants. He…

A: The satisfaction that consumer receives by consuming a good/service is known as a total utility. The…

Q: 5. A consumer's utility function is U = In x, +2 In x; Find the values of x1 and x2 which maximize U…

A: Indifference curve is a curve that is used to depict the satisfaction derived by a consumer from…

Q: 2) The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget…

A: Given: Income= M = $20, price of snacks= Ps= $0.5 As given the optimum bundle is obtained at MRS=…

Q: 4. We learned that the slope of the indifference curve is called the marginal rate of substitution…

A: A indifference curve is a graphical portrayal of a joined items that gives comparative sort of…

Q: 2. Income and substitution effects Manuel is an accountant who enjoys apples and pears. Suppose that…

A: An alteration in price of a given product creates two effects : substitution and income effects on…

Q: 4 Assume you are always willing to trade two Cardinal tickets for one beer, or one beer for two…

A: Formula to calculate MRS:-                                          MRS=∆Y∆X Where; ∆Y=Change in…

Q: 4. Depict in separate graphs indifference curves for the following utility functions i. U(¤1, x2) =…

A: Utility function measures the preferences consumers apply to their consumption of goods and…

Q: . Draw a consumer's indifference curves for orange juice and chicken rice . Describe and explain…

A: Indifference curve shows the combinations of two goods which gives same level of satisfaction to an…

Q: 10. which of the utility function U=5x+3y^2. the indifference curves for this utility function.  @)…

A: MRS of x for y is given by the following formula:

Q: 30. Refer to Figure #5. Assume that the consumer depicted in the figure faces prices and income such…

A: The IC indifference curve represents the combinations of two products that yield the same utility…

Q: PROBLEM (1) Suppose a consumer has just enough money to afford the bundle of 3 apples and 2 oranges,…

A: Utility refers to the amount of satisfaction that a consumer receives from the consumption of a good…

Q: 32/ Assume that a consumer has a given budget or income of $24 and that she can buy only two goods,…

A: Answer in step 2.

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.