Q: John only values food until he has consumed 10 units of it, and after that, he values only shelter.…
A: An indifference curve shows various Combinations of two commodities which gave equal satisfaction to…
Q: PROBLEM (3) A consumer has preferences over bundles of apples (x) and oranges (y) represented by the…
A: Answer: (a). Yes generally the indifference curves are bowed towards the origin. The reason is the…
Q: TRUE OR FALSE Each individual has a utility function that spits out a number representing how happy…
A:
Q: Celine won the prize at the end-of-year party and she had to choose between a $100 Amazon gift card…
A: The budget line is a graphical representation of all possible combinations of the two commodities…
Q: Show how the budget constraint affects utility maximization.
A: Answer: Introduction: A consumer maximizes his/her utility by choosing the bundle of goods that…
Q: Why Indifference curve of a rational consumer cannot be parallel to x-axis and y-axis?
A: Indifference curve shows the different possible combination of two goods that gives the same level…
Q: Susan has the option to purchase eyeglasses, E, $3 each, and orange juice, O, $1 each. Her income is…
A: Budget line shows the different combinations of two goods that a consumer can purchase with the…
Q: Why do we expect that indifference curves will never cross?
A: The economics as a study is based upon the idea that the economies, or the societies around the…
Q: What are the features or properties of the INDIFFERENCE CURVE in economy?
A:
Q: an an indifference curve cross itself?
A: Indifference curve(IC) shows all possible combination of two-goods such that each combination…
Q: Explain why non-convex indifference curve has a corner solution instead of interior solution?
A: IC (Indifference curve) shows the different agreement of two commodities between which a consumer is…
Q: Explain the three characteristics of utility.
A: The economics as a study is based upon the idea that all the societies in the world tend to face a…
Q: t is known that the indifference curve is convex.
A: GIVEN It is known that the indifference curve is convex. What does this tell you about the…
Q: Abhishek's utility function is: U = min {2x– y, 2y – x} Which letter resembles Abhishek's…
A: Utility: - Utility is the satisfaction derived by any consumer from consuming a good or service.
Q: If the price of one of the products is associated with indifference curves increase, all else the…
A: Answer - If the price of one of the products is associated with the indifference curves increase,…
Q: The CHRIS AND DAVID problem Each day Chris buys 2 coffees and 1 tea. Where Chris resides, coffee is…
A: Chris: 2C+1T PC= $1 PT= $0.5 David: 1C+2T PC= $0.5 PT=$1
Q: How do indifference curves represent the consumer's preferences?
A: The indifference curve is a mathematical representation of the combination of all the consumption…
Q: If a budget line is below the indifference curve. What does this mean? Are the points on the…
A: # given the prices of the two goods a budget line always represents the combination of goods which…
Q: Draw a consumer’s indifference curves for pizza and coke. Describe and explain properties of these…
A: Indifference curves are graphical representation of consumer's preference. The consumer finds all…
Q: Why is the slope of an indifference curve convex? Which is the best indifference curve?
A: "Indifference curve is defined as the locus of point of combination of two goods, good 1 and good 2,…
Q: What are indifference curves?
A: The utility is a want satisfying power of a commodity. Marginal utility is the additional utility…
Q: Explain the consumer equilibrium point by using Indifference Curve Approach and the Budget Line.…
A: The equilibrium of consumer is established when he derives maximum satisfaction. In case of…
Q: How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?
A: If prices and consumer’s income will be double then there is no effect in budget constraint and it…
Q: Consider the following equation for an indifference curve: y = 20/x. At point A (2, 10), the MRS is?
A: Given data: The equation for indifference curve is y=20x Point is A2, 10
Q: The above figure shows your budget line and indifference curves. What quantities of gasoline and…
A: A budget line is combination of stating the capacity of a an individual, firm, or business to make…
Q: Ana is in a band and likes to advertise upcoming shows using flyers she posts around the city.…
A:
Q: ) what do you mean by budget constraints, indifference curve and indifference map? What are the…
A: Budget constraint is defined as the possible combinations of the consumption which one can afford…
Q: In case of the complementary goods what is the shape of the indifference curve ??
A: According to the given question Actually complementary goods are those goods which are initially an…
Q: If marginal utility is declining but still positive, total utility is increasing. True or false…
A: The utility is the satisfaction received from consuming a good or service.
Q: With the help of diagram explain how the shape of indifference curve?
A: The indifference curve shows the relationship between the two goods say x and y i.e. the person is…
Q: How to explain indifference curve and also describe the properties of indifference curve?
A:
Q: Question 17 When considering her budget, the highest indifference curve that a consumer can reach is…
A: An indifference curve shows the consumer’s preference scale between two goods.
Q: ist and briefly explain each of the four properties of indifference curves. Provide an example where…
A: indifference curves are made/predicated on several assumptions, including that each indifference…
Q: Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris…
A: A well-behaved consumer means the preference relation is convex and monotonic in nature
Q: Plot and label 3 indifference curves for each of three consumers, using a different graph for each…
A: Utility function : U1 = x1*x2 U2 = min {x1/5 , 2x2 + 3 } U3 = 3x1 + 4x2 Individual 1 with…
Q: Individuals who buy second homes usually spend less for them than they do for their first homes. Why…
A: Law of diminishing marginal utility- As per this law as there is a rise in the consumption of…
Q: Q.2 The slope of the indifference curve is equal to which of the following? A. One B. Marginal…
A: According to the given question Indifference curve was first named by the economist Pareto it…
Q: Elaborate difference varieties/types of indifference curve?
A: Utility refers to the want satisfying power of a commodity. The two approaches used to measure…
Q: Charlie has the utility function U(xA, xB) = xAxB. His indifference curve passing through 35 apples…
A: Given Utility function: U(xA,xB)=xAxB .... (1) His indifference curve passes though (35…
Q: True or false. A change in prices or income can alter preferences and thus the indifference curves…
A: In the mentioned question, we are asked whether there is any shift seen in the indifference curve…
Q: What is the relationship between an indifference curve and budget constraint?
A: Indifference curve: An indifference curve shows the different combinations of two goods that the…
Q: Red yarn costs $4 per yard. blue yarn costs $4 per yard. A) Graph the budget constraint and the…
A: budget constraint represents all the combinations of goods and services that a consumer may purchase…
Q: Indifference curves slopes down because there is a tradeoff between goods. If you give up some of…
A: the points with equal level of satisfaction.Some properties of Indifference curve are as:-1)…
Q: If the price of one of the products associated with indifference curves decreases, all else the…
A: For the aforementioned question, the correct option is C.
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- Assume you have your car broken down just before the weekend. You value your weekend trip as muchas v and if you have to stay home you get the zero utility. There are two dealerships in your town. Atthe beginning of the day they simultaneously choose a price for repair. Dealers know that when you cometo one of them and observe the price, you can always call to another dealer to make an inquiry about hisprice. The call is costless. The other dealer, however, can be occupied for this day. Assume, this happenswith probability which is a common knowledge (but the dealers do not know whether the other dealer isoccupied or not). Assume zero repair cost for the dealer and find a symmetric equilibrium of the game.maddy is a single mom with a weekly budget of $100. She can spend her weeklyincome on food and diapers for her son. Price of food is $1 and price of a diaperis 50 cents. Her son needs at least 5 diapers a day, therefore she must purchaseat least 35 diapers weekly. maddy utility function is U (f, d) = f 0.9d0.1,where f and d represent quantity of food and diapers, respectively.Part aFind Jennifer’s optimal consumption bundle. Make sure to draw her budgetconstraint and indifference curves and clearly demonstrate your solution.Part bmaddy uncle Sam, who is aware of her financial troubles, offers to help herout. Specifically, he offers to pay half of her weekly diaper expenses. Howmany diapers maddy would buy now? Again, demonstrate your solution bothgraphically and analytically.abby is a single mom with a weekly budget of $100. She can spend her weeklyincome on food and diapers for her son. Price of food is $1 and price of a diaperis 50 cents. Her son needs at least 5 diapers a day, therefore she must purchaseat least 35 diapers weekly. Jennifer’s utility function is U (f, d) = f 0.9d0.1,where f and d represent quantity of food and diapers, respectively.Question 1 Part aFind abbys optimal consumption bundle. Make sure to draw her budgetconstraint and indifference curves and clearly demonstrate your solution.
- You are considering going to a football game. However, the roads are cover in ice due to bad weather. Your ticket was a gift. You derive a value of z from attending the game, and a cost of D for driving on the icy roads. Your utility function is given by: ug(Z) + ui(D) = In(Z - 3) - In(2 - D). In your ultimate wisdom, you calculate that the cost of driving on the icy roads is 1 unit (So, D=1). What is the minimum value you must obtain from attending the game, so that you decide to go? Solution sent me fast ..You were promoted as the manager of a new Clean-Well Sanitary Store that sell cleaning andsanitation products wholesale. You recently read in an article that there the price of vitamins isexpected to increase by 20 percent. How will this affect your store’s sales of sanitationproducts?7. Bob receives utility from days spent traveling on vacation domestically (D) and daysspent traveling in a foreign country (F) as given by the utilityU(D; F) = DFThe price of a day spent traveling domestically is 160 pounds and in a foreigncountry 200 pounds. Bobís annual budget for traveling is 8000 pounds. (a) Find Bobís utility maximising choice of days traveling domestically and of daystravelling in a foreign country. Find also his utility level from consuming thatbundle. Suppose that the price of domestic traveling increases to 250 pounds per day.Denoting his budget for traveling x, (suppose by now that it is unknown) findthe demand for D and F under the new prices as a function of x.
- True/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)If Utility =.5lnX++3Z+10+4√W then Marginal utility from W is...a. A young connoisseur has $600 to spend to build a smallwine cellar. She enjoys two vintages in particular: a 2001French Bordeaux (wF) at $40 per bottle and a less expensive 2005 California varietal wine (wC) priced at $8. Ifher utility is U (wF, wC))=wF2/3 w C1/3 ,then how much of each wine should she purchase?b. When she arrived at the wine store, this young oenologistdiscovered that the price of the French Bordeaux hadfallen to $20 a bottle because of a decrease in the valueof the euro. If the price of the California wine remainsstable at $8 per bottle, how much of each wine shouldour friend purchase to maximize utility under thesealtered conditions?c. Explain why this wine fancier is better off in part (b)than in part (a). How would you put a monetary value onthis utility increase?
- Suppose there are 100 consumers with identical individual demand curves. When the price ofa movie ticket is $8, the quantity demanded for each person is 5. When the price is $4, thequantity demanded for each person is 9. Assuming the law of demand holds, which of thefollowing choices is the most likely quantity demanded in the market when the price is $6? Group of answer choices 700 1,000 1,200 4004. Two individuals, Amir and Budi, consume two goods, clothes (X) and shoes (Y). The utility functions for the two individuals are given as: Utility function of Amir, UA = 15X0.25Y0.75Utility function of Budi, UB = 25X0.5Y0.5 The current price for clothes (Px) is Rp 100,000 and the current price for shoes (PY) is Rp 150,000 a. Determine marginal rate of substitution (MRSXY)between clothes (X) and shoes (Y) for Amir and Budi! Please explain. b. Amir is currently consuming 5 units of clothes (X) and 10 units of shoes (Y), whereas Budi is consuming 12 units of clothes (X) and 8 units of shoes (Y). At this current consumption, have Amir and Budi reached the efficient allocation of clothes and shoes? If they have, explain why. If they have not, calculate the optimal allocation and explain. c. Considering the relative price between of clothes and shoes, at the current consumption, have Amir and Budi reached exchange equilibrium? Please explain d. Use the Edgeworth Box to illustrate the…4. Two individuals, Amir and Budi, consume two goods, clothes (X) and shoes (Y). The utility functions for the two individuals are given as: Utility function of Amir, UA = 15X0.25Y0.75Utility function of Budi, UB = 25X0.5Y0.5 The current price for clothes (Px) is Rp 100,000 and the current price for shoes (PY) is Rp 150,000 a. Determine marginal rate of substitution (MRSXY)between clothes (X) and shoes (Y) for Amir and Budi! Please explain. b. Amir is currently consuming 5 units of clothes (X) and 10 units of shoes (Y), whereas Budi is consuming 12 units of clothes (X) and 8 units of shoes (Y). At this current consumption, have Amir and Budi reached the efficient allocation of clothes and shoes? If they have, explain why. If they have not, calculate the optimal allocation and explain. c. Considering the relative price between of clothes and shoes, at the current consumption, have Amir and Budi reached exchange equilibrium? Please explain d. Use the Edgeworth Box to illustrate the…
