Answered: 4. xX2 Ix X1 Given this indifference…

4. xX2 Ix X1 Given this indifference curve, if the item corresponding to the horizontal axis is a good, explain why the other item must be a bad.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 2CQQ

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

4.
x2
Ix
X
X1
Given this indifference curve, if the item corresponding to the horizontal axis is a
good, explain why the other item must be a bad.

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