If the price of good X is $40 and the price of good Y is $35  Find the value of Marginal rate of Substitution of good X and Good Y

Q: Comparing the slope of the budget line (Opportunity Cost of Good Y) with the slope of the…

A: opportunity cost means the worth of the following most elevated esteemed elective utilization of…

Q: Assume for this question only that when the price of dresses decreases, less of that good is…

A: When the price of the good (dresses) decreases then there must be an increase in demand but here it…

Q: Disscuss the Marginal rate of substitution

A: Marginal rate of substitution The marginal rate of substitution (MRS) in economy is the amount of a…

Q: Assume there are two goods, prices are indicated, and there is a consumer with a specified income.…

A: Price effect is the effect of the price change on the quantity demanded of a product. The price…

Q: Suppose the unit price of a good rises. Identify how the income effect and the substitution effect…

A: Giffen Goods: the goods whose demand increases when their prices increase, resulting in an…

Q: Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, a) Xand Y…

A: An indifference curve shows the various combinations of two goods that give the consumer equal…

Q: If two goods are perfect complements, then which of the following is correctE Goods can be normal or…

A: Here in the question, it is asked about the perfect complement goods.

Q: It is proven mathematically that indifference curves are convex due to: (a) rising marginal rates of…

A: An indifference curve is the locus of all those points which represents the different bundle of two…

Q: Question: If X and Y are perfect subsbtutes, the marginal rate of substitution is 5, the price of…

A: The correct option is : Option (c) 8. Explanation: The informataion given to us are: X and Y are…

Q: What is the slope of the indifference curve at a point called? The Marginal Utility Ratio (MUR) The…

A: The consumer will maximise utility at a point where the slope of an indifference curve is equal to…

Q: Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, X and Y are…

A: The goods are consumed in fixed proportions means the consumption of the good is complemented to…

Q: Explain substitution and income effect by citing an example

A: Substitution and income effect are the two components of price change in the market.

Q: If income consumption curve is positively sloped, one good is inferior and the other good is normal…

A: Income consumption curve is the locus of different combinations of two goods that shows consumption…

Q: Jack currently works 38 hours per week at a wage rate of $15 per hour. His marginal rate of…

A: The consumer equilibrium is the condition when the consumer maximizes its satisfaction by spending…

Q: Homer spends much of his monthly income on home mortgage payments. The interest on his…

A: "Correct answer is option (D)."

Q: Compute marginal utilities and marginal rate of substitution for each of the utility functions given…

A: The function which helps in measuring the satisfaction or welfare of a consumer as being consumption…

Q: A consumer has the following demand function for good 1: x1 = (1/4)(m/p1) The original price of the…

A: Individuals (consumers) directly concerned within the acquisition, use, and disposal of economic…

Q: A decrease in the price of Good Y can result in a decrease of the quantity of Good Y demanded by…

A: Meaning of Substitutes Goods: The term substitutes goods refer to the situation under which there…

Q: Calculate the marginal rate of substitution if the consumer is will to leave good y from 100 to 60…

A: Utility refers to the satisfaction. The aim of the consumer is to maximize their utility. The…

Q: Which of the following do the income and substitution effects explain? why the supply curve is…

A: The quantity that would in turn be demanded at different levels of prices, and could be calculated…

Q: Suppose that beer and pretzels are unrelated goods (neither complements nor substitutes). Which of…

A: Basics:- Substitution effect occurs when two goods can replace consumption of each other. Example:-…

Q: he rate of market substitution is:             The consumer’s marginal utility             The…

A: The rate which depicts the amount of one good being substituted for another good and is being used…

Q: How is utility maximization obtained in the competitive factor market? Explain your answer.

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…

Q: Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF =…

A: Given:Maria's income is $2000,price of food (PF) is $5 and price of clothing (PC) is $20 Maria can…

Q: Suppose a consumer's labor supply is negatively sloped, meaning as wage increases, the consumer…

A: An individual trades off between labor and leisure, with a given amount of work hours. The labor…

Q: Good X and good Z have a constant marginal rate of substitution (MRS) of one. Draw the…

A: Indifference curve: It refers to the curve that is a combination of two or more goods. It provides…

Q: Comparing the slope of the budget line (Opportunity Cost or relative price of Good Y) with the slope…

A: In economics, the marginal rate of substitution (MRS) is the quantity of one good that a customer is…

Q: Consider a downward-sloping demand curve. When the price of a normal good increases, the income and…

A: For normal goods, the income effect and the substitution effect both work in the same direction; a…

Q: Assume when the price of dresses decreases, less of that good is demanded. Illustrate the income and…

A: When the price of dresses decrease, then without checking the other factors,  if we consider the own…

Q: James Bond consumes two goods: vodka (x) and martini (y). His preferences are described by the…

A: Given: U(x,y) = (1x+9)y To find: Marginal rate of substitution in the point (2;2)

Q: Which one of these goods is likely to have the largest substitution effect? Select one: a. Skittles…

A: Substitution effect arises when people have high elasticity of demand for a good, so they switch to…

Q: when is the substitution effect greater than the income effect?

A: Income Effect is the change in the demand caused due to purchasing power of the consumer due to…

Q: Define The income and substitution effects.

A: The demand for a good refers to the total amount of a good which an individual is able and willing…

Q: Gabby has the utility function U(X,Y) = X0.y0.26 When Gabby consumes X= 5 and Y=8 she has a marginal…

A: MRS = (MUx)/(MUy) MUx = dU/dx = Y0.25.0.5X(0.5-1) = 0.5Y0.25X(-0.5) MUy = dU/dy =…

Q: A consumer consumption bundle contains good X and Y. Suppose the price of good X goes up and a…

A: Introduction: Consumption is the usage of products and services by households in economics.…

Q: Given the following Cobb Douglas Utility function u(x1, x2) = x1cx2d.What is Marginal Rate of…

A: Answer- Need to find- Marginal Rate of Substitution MRS x1, x2  Given in the question- u(x1, x2) =…

Q: Make a curve of the budget line curve with the Indifference curve, make a separation between the…

A: In economics, and in particular in consumer choice theory, the substitution effect is one aspect of…

Q: When price of a pizza decreases from $12 to 10, it is definitely the case that the: A. Income…

A: The demand and supply mechanisms in a country are referred to as the invisible forces in the economy…

Q: Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is…

A: The marginal rate of substitution (MRS) is that the quantity of smart|an honest|a decent} that a…

Q: The change in consumption of a good that occurs when its price falls is the result of Select one:…

A: Income effect refers to the change in the quantity of good due to change in the price of that good,…