Q: List and explain the four (4) properties of the indifference curves
A: The indifference curve is the graphical representation of the different combination of two goods…
Q: State the reason that why indifference curves never intersect each other. Furthermore, why higher…
A: An indifference curve shows the various combinations of two goods that give the consumer equal…
Q: Is the indifference curve of U(x1,x2)=max(x1,x2) considered to be the curve for a perfect complement…
A: The utility function for perfect complements is given by: U(x1, x2) = min (x1, x2). Suppose a…
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: Define indifference curve and budget line and their slopes. Discuss various properties of the…
A: An indifference curve, with respect to two commodities, is a graph showing those combinations of the…
Q: Define indifference map in not more than 2 lines
A: Before getting to the definition of indifference map we must first understand what is indifferent…
Q: indifference curve
A: Indifference curve (IC) is the locus of various combinations of commodities yielding same utility.…
Q: an an indifference curve cross itself?
A: Indifference curve(IC) shows all possible combination of two-goods such that each combination…
Q: Q) U = xy and y = x(1+y) Are points (1,9) and (5,1) on the same indifference curve? Explain it…
A: An Indifference curve represents different combinations of two goods ( say , good X and good Y )…
Q: MRS is constant along a linear indifference curve.
A: The 'marginal rate of substitution' along an indifference curve is given by MRS=-MUxMUy
Q: The value in Y axis has changed from 14.94 to 10.98 and the value in X axis has changed from 9.12 to…
A: Change in Y is 3.96 Change in X is 6.83
Q: Which one of the following is incorrect about the indifference curves? All combinations in an…
A: Indifference Curve: An indifference curve represents various combinations of two commodities that…
Q: Which indifference curves violate the assumption of monotonicity? U3 only. U1 and U3. U1, U3 and U4.…
A: The assumption of monotonicity is that the indifference curve is negatively sloped. If the…
Q: Q12. If indifference curve is straight line downward sloping, (a) MRS is increasing (b) MRS is…
A: According to the given question An indifference curve is a curve which is actually and generally…
Q: Draw the indifference curves for nickels and dimes. Would they ever have a non-constant slope
A: Indifference shows the combination of two goods and services which provide the same utility. It is…
Q: Define the indifference curve. Define the indifference map for an individual.
A: The indifference curve is one of the important aspects of consumer demand theory. It is used to…
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: Explain why indifference curvesa. are downward sloping.b. are convex to the origin.c. do not cross.
A: The indifference curve shows all the different combinations of two goods that provide the same…
Q: discuss the three assumptions of indifference curves.
A: "Utility is the usefulness of a commodity for the consumer." When the consumer derives the same…
Q: Slope of Indifference curve is convex to origin because of Select one: a. MRS is vertical Ob. MRS is…
A: Indifference curve is the locus of points showing different combinations of two commodities, which…
Q: Why indifference curves never intersect. Prove graphically?
A: IC(indifference curve) shows us the various combination of two products/goods where the buyer is…
Q: 47. When indifference curve is L shaped, then two goods will be
A: Answer is given below
Q: What are indifference curves?
A: The utility is a want satisfying power of a commodity. Marginal utility is the additional utility…
Q: Isn't the utility function is perfect complement: min{} and the indifference curves should be…
A: A potential extension to the analysis is general equilibrium analysis or how demand and supply…
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: Depict utility function on a number line: U(x)=(x-6)^2 Indifference set around x=3 Lower contour set…
A: Utility function is defined as a function that measures the satisfaction derived by a consumer as a…
Q: 9. A higher indifference curve shows
A: Indifference curves shows the utility derived by the consumers by consuming various bundles of 2…
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: 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: Which are the three main assumptions of indifference curves? Please do the comparison with each…
A: Indifference curve: It refers to curve that shows the combination of two goods that a consumer can…
Q: How do we decide the amount we buy on the indifference curve? MU1/P1 = MU2/P2 %3D MU1/P1 = P2 MU1/P2…
A: Indifference curve shows the combinations of goods that give consumer the same level of…
Q: Amy enjoys eating muffins and scones. The following graph displays one of Amy's indifference curves,…
A: The MRS is the amount of a product that a consumer is willing to sacrifice in order to get 1 unit…
Q: Show that an indifference curve a Cannot be thick (cannot have positive thickness, rather than…
A: Indifference curve refers to the different combinations of two commodities that the consumer can…
Q: Define Indifference Curve. Explain properties of Indifference Curve with the help of…
A: Indifference Curve: An indifference curve represents various combinations of two commodities that…
Q: show that an indifference curve cannot be thick (cannot have positive thickness, rather than being…
A: An indifference curve, with relevancy two commodities, could be a graph showing those combinations…
Q: Which of the following is NOT true about indifference curves? O They are downward sloping O They do…
A: An Indifference curve is a locus of the combination of all the points that represent a different…
Q: 3) Diminishing marginal rate of substitution can be seen when indifference curves A) become flatter…
A: The curve that depicts combinations of goods that could provide the consumer with an equal level of…
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: An indifference curve is also known as___________.
A: Indifference curve - It is a graph that depicts the combination of two goods where at every point…
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: Define indifference curve .
A: Utility refers to the want satisfying power of a commodity. The two approaches used to measure…
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: In your own words, explain what indifference curves are. Give 4 properties of indifference curves.
A: (Q) In your own words, explain what indifference curves are. Give 4 properties of indifference…
Q: A higher indifference curve shows
A: A higher indifference curve shows higher level of
Q: ence curve and Discuss the properties of Indifference curv
A: Indifference curve(IC) is the locus of various combinations of commodities yielding same utility. If…
Q: Each person has an infinite number of indifference curves. True False
A: True Statement.
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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- Here is one hypothesis: A well-funded social safety net can increase economic equality but will reduce economic output. Explain why this might be so, and sketch a production possibility curve that shows this tradeoff.Suppose there are two possible income distributionsin a society of ten people. In the first distribution,nine people have incomes of $60,000 and one personhas an income of $20,000. In the second distribution,all ten people have incomes of $50,000.a. If the society had the first income distribution,what would be the utilitarian argument forredistributing income?b. Which income distribution would Rawls considermore equitable? Explain.c. Which income distribution would Nozick considermore equitable? Explain.Please no written by hand Suppose all workers have the same preferences represented by U = (sqroot)w - 2x , where w is the wage and x is the proportion of the firm’s air that is composed of toxic pollutants. There are only two types of jobs in the economy, a clean job (x = 0) and a dirty job (x = 1). Let w0 be the wage paid by the clean job and w1 be the wage paid for doing the dirty job. If the clean job pays $16 per hour, what is the wage in dirty jobs? What is the compensating wage differential?
- Consider a large tract of land that is used for grazing sheep. Now consider two differentproperty ownership regimes: common property ownership, in which all shepherds haveunrestricted access to the land, and private property ownership, in which there is a singlelandowner who hires shepherds up until the point where their wage is equal to the marginalproduct of their labor. Show graphically how common property resource ownership can lead toovergrazing (too many shepherds using the same open-access rangeland) in the absence ofinstitutional constraints that would ensure an efficient level of resource usage. Contrast this withprivate property ownership. On your graph, label the axes, the average and marginal products oflabor, the wage, scarcity rents, the efficient number of shepherds, and the number that would beexpected under common property ownership. Explain the source of the inefficiency. Wouldprivatization be equitable? Would it be possible to achieve an efficient resource…Assume that the current Disability Insurance (DI) benefi t for those whoare unable to work is $X per day and that DI benefi ts go to zero if aworker accepts a job for even 1 hour per week. Suppose that the benefi trules are changed so those disabled workers who take jobs that pay lessthan $X per day receive a benefi t that brings their total daily income(earnings plus the DI benefi t) up to $X. As soon as their labor marketearnings rise above $X per day, their disability benefi ts end. Draw theold and new budget constraints (label each clearly) associated with theDI program, and analyze the work-incentive effects of the change inbenefi ts.Suppose you were a benign government who wanted to improve Angela’s situation, but withoutsacrificing the aim of Pareto Efficiency. One policy advisor tells you that all you need to do to achievethis is to change Angela’s reservation option. Is this correct? Please explain with all steps the awnser of this question
- Heterogeneity in an endowment economy Suppose we have two typesof households: A and B. The utility maximization problem for a consumerof type i is max InCi,t+β ln Ci,t+1 Ct,Ct+1subject to Ci,t +Ci,t+1/ 1 + rt = Yi,t + Yi,t+1 / 1 + rt Note that the A and B households have the same discount rate and the same utility function. The only thing that is possibly different is their endowments. 1, Write down the Euler equation for households A and B.Consider a worker who earns $20/hour in the labor market and receives $50 per week innon-labor income. Assume the total number of hours available for work (h) and leisure(L) is 168 hours per week (i.e., ? = 168 = ℎ + ?). a. Draw the budget constraint for this individual. Label the endowment point. b. What is the maximum value of consumption that this individual could achieve ina week? c. In the United States, the Fair Labor Standards Act requires workers to be paid 1.5times their usual hourly wage for “overtime” work, defined as work in excess of40 hours in a week. If this law applies to the worker described above, how does itchange the budget constraint? d. Now suppose Congress passes an income tax. The income tax applies to labor andnon-labor income. The Fair Labor Standard Act is still in effect. The first $1,000in weekly income is exempt from the tax. However, every dollar above $1,000 istaxed at a rate of 10%. (To be clear: the tax on $1,000 in income is 0, the tax on$1,001 is…to what extent is incone in equality a result pf choices made by the individual?
- Suppose that the last dollar that Victoria receives as income brings her a marginal utility of 10 utils while the last dollar that Fredrick receives as income brings him a marginal utility of 15 utils. If our goal is to maximize the combined total utility of Victoria and Fredrick, we should: a. Redistribute income from Victoria to Fredrick. b. Redistribute income from Fredrick to Victoria. c. Not engage in any redistribution because the current situation already maximizes total utility. d. None of the above.Need Step by Step answer: How to draft on Excel. Because Income depends on work effort and work effort depends on nutrition, suppose the relationship between income (Y) and total food availability (F) in a poor household is given by: Y = 10F + 20F2 – 0.6F3 a) If food availability in a two-person household is 20, would it be “rational” to share the food? Explain. b) If food availability in a two-person household is 30, would it be “rational” to share the food? Explain.Consider Angela who currently works as a data scientist with machine learning expertise. Recently,she was offered a job by Bruno’s firm. The job offer includes a higher salary than her current job andthe freedom to choose the number of work hours per day. But Angela is also an amateur musicianwho desperately dreams of becoming a professional one day. This motivates her to practice musicas much as possible, which makes her value her free time very much.Using the model of individual choice, and assuming Angela accepts the job offer, graphicallyillustrate the impact on her choice of free time and consumption. Fully label your diagram. Notethat there are no actual numbers given in this question: you may make them up or simply useappropriate notations. Explain specifically its impact on the following:• Angela’s choice of free time• Angela’s consumption level• Angela’s utility level