Consider the preferences represented by the following indifference curves. These preferences are (check all that apply - if there is not enough information to confirm thatone of these applies, leave it unchecked).good 2Select one or more:a. Monotoneb. Strongly monotonec. Convexd. Strictly convexe. None of the abovegood 1

The given indifference curves represent straight lines, which suggests perfect substitutability…

Answered: Consider the preferences represented by…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section5.A: Appendix Analyzing Consumer Choice Graphically: Indifference Curve Analysis

Problem 3TY

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Explain why indifference curvesa. are downward sloping.b. are convex to the origin.c. do not cross.
Gopal is a rational consumer and consumes two goods X and Y. Is a cardinal measure of utility or satisfaction necessary in order to sketch a set of indifference curves? What are the main characteristics of indifference curves? On the same set of axis draw three indifference curves showing increasing marginal rate of substitution as we move down the indifference curve.
We claimed in the text that if preferences were monotonic, then a diag-onal line through the origin would intersect each indifference curve exactly once. Can you prove this rigorously? (Hint: what would happen if itintersected some indifference curve twice?)
Isn't the utility function is perfect complement: min{} and the indifference curves should be L-shaped instead of convex and concave?
Gopal is a rational consumer and consumes two goods X and Y. Is a cardinal measureof utility or satisfaction necessary in order to sketch a set of indifference curves? Whatare the main characteristics of indifference curves? On the same set of axis draw threeindifference curves showing increasing marginal rate of substitution as we move downthe indifference curve. Please answer it in little more detail as it is descriptive
Consider a budget line drawn with apples on the vertical axis and oranges on the horizontal axis. The consumer's income is $100, the price of apples is $5, and the price of oranges is $10. Suppose the consumer's income falls to $75.00, but the prices of apples and oranges remain unchanged. The change in income produces a: a) parallel shift inward of the indifference curves. b) new budget line which is flatter than the original one. c) new budget line which is steeper than the original one. d) parallel shift inward of the budget line
In case of the complementary goods what is the shape of the indifference curve ??
Suppose that a consumer has the indifference map shown above. The relevant budget line is LZ. The price of good X is $20.(a) What is the consumer’s income? Please show your calculations.(b) What is the price of good Y? Please show your calculations.(c) What is the slope of the budget line LZ. (d) What point in the graph will lead to utility maximizing with the budget line LZ and the indifference curves as shown above? Please label the point C. (e) What is the marginal rate of substitution (slope of the indifference curve) at the utility maximizing point you have shown in (d)?(f) Please explain why the consumer will not choose point A or point B.
Economists use "indifference curves" to indicate individuals' preferences. These curves are parallel to each other and do not intersect. Which of the following statements is true? A) The further away an indifference curve is from the origin at (0,0), the lower is the individual's happiness. B) On a downward-sloping indifference curve, the points lower down (towards the right-hand-side) on the curve are preferred by the individual. C) The closer an indifference curve is to the origin at (0,0), the higher is the individual's happiness. D) The further away an indifference curve is from the origin at (0,0), the higher is the individual's happiness.
Suppose a consumer buys only two goods x and y and spends her entire income on these teo goods. She must first but some fixed quantity y before she buys any amount of x. After purchasing y; what matters is the quantity of x only and utility will increase only by buying more x. Please Draw the indifference curves. * Please draw the indifference curves as the solution*
Graph and explain indifference curves for the following situations:(i) An individual has constant marginal utility toconsumption in both periods.(ii) An individual does not derive utility from this period’sconsumption, but does from the next period’sconsumption.(iii) An individual’s utility decreases with consumption inboth periods.
Asap The marginal rate of substitution is the slope of an indifference curve. True False.

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