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A: An indifference curve is a curve that shows combinations of two goods that the consumer consumes…
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Q: a. Give as many reasons as you can why we believe that indifference curves are convex to the origin.…
A: We are authorized to answer one question at a time since you have not mentioned which question you…
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A: Disclaimer: Since you have asked multiple questions, we will solve the first question for you. if…
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A: Indifference curve shows different combinations of two goods that give same level of utility.
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A: Indifference curve is the locus of different combination of two goods that a consumer can consume…
Q: Graph and explain indifference curves for the following situations: (i) An individual has constant…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Which of the following is NOT the goal of the consumer? O be on the highest indifference curve spend…
A: ‘Utility’ refers to the satisfaction, which a consumer derives from consuming a good. Marginal…
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Q: (d) What point in the graph will lead to utility maximizing with the budget line LZ and the…
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A: Slope of indifference curve= MRS
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A: Indifference curve shows different combinations of two goods that give same level of utility.
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A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Pls help with below homework. A consumer’s utility function is in the form of: U(X,Z) = F(X,Z)…
A: the indifference curve (IC) explains the relationship between two goods (in this case X and Z) that…
Q: Suppose the price of beans is increased. Which of the following statements is true? Select one: O a.…
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Q: Šuppose Rachel is indifferent between bundles A: (4, 8) and B : (8,4). If she has diminishing MRS,…
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A: Utility: It refers to the maximum satisfaction which a consumer gets from the purchase of the goods…
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A: The ‘50’ in the utility function did not have any influence on the optimal consumption bundle. The…
Q: A consumer has a utility function given by U(x, y) = 3x + 2y. The price of x and y are both equal to…
A: U(x,y)= 3x2 + 2y2 Px= 1 Py= 1
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A: Marginal utility is the addition to the total utility from consuming an additional unit of a…
Q: Suppose the price of beans is increased. Which of the tollowing statements is true? Select one: O a.…
A: With price of beans increased, the quantity consumed or purchased with respect to given budget will…
Q: U = InC,+ BlnC, Please compute indifference curves numerically in an excel file. Suppose that ß…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Qu Robert's utility function is U(1, y) = 2/T + y. n every graph for this question, set y in the…
A: U(x,y) = 2x + y
Q: Slove the attachment
A: The consumer is in equilibrium when the marginal rate of substitution (MRS) is equal to the price…
Marginal Rate of Technical Substitution
MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.
Preferences and Utility Analysis
Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.
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- please only do: if you can teach explain each partc: what does it mean? can you show graphs: For these to be optimal choices with such preferences, the indifference curve through a must lie entirely on or above the budget line associated with (p, w), and simi- larly for r' for the budget line associated with (p', w'). how do you know this:Because each of these bundles lies below the other budget line, this implies that the indifference curves must cross, which is impossible. can you show graphs: note that (3,1) is a conver combination of x and x', so for conver preferences must be weakly preferred to x (the less preferred bundle between a and a'). But then the bundle (3,5/3) must be strictly preferred z, contradicting that is optimal given the initial budget setMr. Dogan has 4000 TL to spend. He considers buying meat whose price is 400 TL per kg. and cheese whose price is 160 TL /kg. Given this a) What condition (equality) leads him to a utility maximization. State the condition numerically and tell clearly what each of the variables mean in that equation b) Now suppose that income of Mr. Dogan and price of meat does not change but price of cheese is down to 130 TL/kg. Do the equality and optimal basket found in a still maximize the utility? If not; what is the new condition for utility maximization (write the condition as a numerical equation defining the variables in the equation)No written by hand solution Assume Fred has the following preference relation on [0, 1]: x ≿ y if and only if x ≤ y for all x ̸= 1 and y ̸= 1; and 1 ≻ z for all z ∈ (0, 1), 1 ∼ 1 and 0 ≻ 1. Does there exists a utility representation for this preference relation? If yes, provide a utility function. If no, explain. Show your work.
- Assume that an individual has convex indifference curves (i.e. diminishing MRS). Suppose the individual has $3 to spend on good #1 and good #2. In addition, suppose we know that at the bundle where q1=1 and q2=1, the marginal utility of good #1 is 2 utils and the marginal utility of good #2 is 1 util. Given this information, which set of prices would this individual prefer to face? A. p1=1 and p2=2 B. p1=2 and p2=1 C. p1=2 and p2=2Explain the consumer equilibrium point by using Indifference Curve Approach andthe Budget Line. What is the necessary condition for the consumer equilibrium? Explain whyconsumer is not in equilibrium if this condition does not fulfilLexicographic preferences describe preferences where an economic agent prefers any amount of one good (X) to any amount of another (Y). SpeciÖcally, if o§ered several bundles of goods, the agent will choose the bundle that o§ers the most X, no matter how much Y there is. Only when there is a tie between bundles with regard to the number of units of X will the agent start comparing the number of units of Y across bundles. Show that Lexicographic preferences are transitive
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).T/F Explain Utility numbers cannot be negative since higher utility means a con- sumer is better off.a) Show the derivation of the individual demand function for a utility maximizer consumer and b) explain the common properties for the points on this function.
- A.Suppose that Fiona likes cashews better than almonds and likes almonds better than walnuts. She likes pecansequally well as hazelnuts and prefers hazelnuts to almonds.Can we characterize Fiona’s preferences of being “complete”? Can we characterize them of being “transitive”?Justify your answer.B. “Pertaining to different good characteristics; it is possible to distinguish between three different types ofindifference curves. One would be the typical negatively sloped convex function, a second would be a negativelysloped straight line, and a third would be an L-shaped function”.Examine the validity of this statement. Is it possible for the indifference curve to be positively sloped?Pareto eliminated psychology from economics:a. by defining utility as ordinal, not cardinal utilityb. searching for secondary qualities of thingsc. defined rationality as consumer behavior only after they have bought something several timesd. by accepting revealed preference.If point XYZ falls on different level pf indifference curve, what wil happen? a. point x maybe higher that point y or vice versa and well as Z b. the will have same quantity combination c. it will cost so much d. the will have different level of satisfaction If point XYZ falls on different level of indifference curve, what will happen? a. XYZ will have same quantity combination b. satisfaction is the same c. no satisfaction is derived because it doesn't have a cost d. point z will equal point x and y in yielding satisfaction More than zero but less than one is what kind of price elasticty a. relatively elastic b. relatively inelastic c. perfectly elastic d. perfectly inelastic