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A: Here answer is “One indifference curve is tangent to the relevant budget line.”
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A: Hi , as per our guidelines we are only allowed to do first 3 sub parts of a question . Kindly repost…
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A: U(x, y) = (x − γ)α (y − δ)β Total Differential : dU=[∂U/∂x]dx+[∂U/∂y]dy ∂U/∂x=α(x − γ)α-1(y − δ)β…
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A: (Q) Which of the following is not the property of indifference curves? a. Indifference curve is…
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A: Indifference Curve: An indifference curve represents various combinations of two commodities that…
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A: Answer in step 2
Q: Q-: Define indifference curve and elaborate different varieties/types of indifference curve
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A: Given that the utility function for both good x and good Y are U(x,y) = 20 = x^0.5y^0.5
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A: As Given utility function is U=min(5x,4y)
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- Using graphical analysis show how the following demand curves can be derived from indifference curve approach to understanding consumer behavior: What are the main assumptions for each of these demand curves? a) Marshallian demand curve b)Hicksian demand curveClancy is an accountant who enjoys donuts and muffins. Suppose that the price of donuts increases. As a result, the purchasing power of Clancy's paycheck is diminished. Therefore, he reduces his consumption of all goods, including donuts. This phenomenon is known as the (substitution/income) effect.  Show Transcribed Text  Show Transcribed Text shift of/movement along at every price /due to a change in price05- Income and Substitution Effects Question 3
- Q5 plz help quick The marginal rate of substitution of nickels for dimes is O negative and constant. O negative but varies from point to point on a given indifference curve. O zero. positive but decreases as the number of Nicole's increasesUsing Figure 4 , explain why the point of tangency of the budget line with an indifference curve is the consumer’s equilibrium position. Explain why any point where the budget line intersects an indifference curve is not equilibrium. Explain: “The consumer is in equilibrium where MRS = PB /PA.”Question 36 The rate of market substitution is: The consumer’s marginal utility The consumer’s total utility The slope of the indifference curve The slope of the budget line
- 4. Show how to construct the reference dependent utility function for two friends Kate and Mary whose gains and losses are listed as follows : Kate's net worth is $ 4.5 million ( decreased from $ 5.5 to $ 4.5 million ) Mary's net worth $ 3.2 million ( increased from $ 3 to $ 3.2 million ) ( First determine the reference point ( use a parameter ) and then derive reference utility function for each ) .The image below shows an increase in the indifference curve for halal and haram goods. Explain the meaning of the shift in the indifference curve in figures (a) and (b), respectively.At any point on an indifference curve, the slope of the curve measuresthe consumer'sa. income.b. willingness to trade one good for the other.c. perception of the two goods as substitutes or complements.d. elasticity of demand.
- Labor-Leisure choice. Uses 80 hour maximum work week. Utility = R3C2 R = leisure C = dollar amount of income for consumption Budget Line 1: Wage = $16 per hour. No other income. Draw the Labor-Leisure diagram, including the budget line. Solve the point of optimization, and label it point A. Draw the indifference curve. Label it U1 Budget Line 2: Wage = $22 per hour. No other income. Draw the budget line for this new $22 wage. Solve the point of optimization, and label it point B. Draw the indifference curve. Label it U3 Use an auxiliary budget line to separate the income effect from the substitution effect. Identify the substitution effect as point S. Draw the indifference curve. Label it U2 The point of optimization for part C can be labeled, rather than numerically solved, as long as the drawn answers show expected results for two normal goods.24. Oscar consumes only two goods, X and Y. Assume that Oscar is not at a corner solution,but he is maximizing utility. Which of the following is NOT necessarily true?(a) MRSxy = Px/Py.(b) MUx/MUy = Px/Py.(c) Px/Py = Income.(d) Px/Py = slope of the indifference curve at the optimal choice.(e) MUx/Px = MUy/Py.Suppose Coffee and Tea have a perfect substitute indifference curve, with Coffee on the X-axisand Tea on the Y-Axis. We are also given that for the person, MRS = 10 and MRS < Px/Py.Graphically show and explain the optimal choice of the person. Show the necessarymathematical work to accompany your answer.