Q.2 The slope of the indifference curve is equal to which of the following? A. One B. Marginal utility C. Marginal rate of substitution D. None of these
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- Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.(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.Asap The marginal rate of substitution is the slope of an indifference curve. True False.
- Explain why indifference curvesa. are downward sloping.b. are convex to the origin.c. do not cross.Mrs. Rochester earns $4500 a week and spends her entire income on computers andpastries, since these are the only two items that provide her utility. Furthermore, a) Draw an indifference curve showing the optimum choice. Label the optimum aspoint A. What would be the marginal rate of substitution at the point thatcorresponds to the optimal consumption choice? Interpret the marginal rate ofsubstitution. b) What would be the new marginal rate of substitution that corresponds to theoptimal consumption choice? Interpret the marginal rate of substitution. c) Assume for this question only that when the price of computers decreases, less ofthat good is demanded. Illustrate the income and substitution effect of this pricedecrease.Pls help with below homework. With the help of indifference curve diagram (gift goods on one axis and all other goods on the other) to illustrate that one is better off receiving cash grant than a gift
- Given the Indifference Curve, answer the ff: 1. The following points all yield the same happiness, except 2. Which of the following points yield the highest happiness? 3. Which of the following points is outside your budget? 4. The following points cost the same, except 5. The following lies on the same indifference curve except 6. Which point yields the highest happiness?a. What is your marginal rate of substitution of $1 bills for $5 bills? b. Produce an indifference curve graph for your preferences over these two goods. Make sure you label your graph very carefully and precisely.Pick a point on an indifference curve for wine andcheese, and show the marginal rate of substitution.What does the marginal rate of substitution tell us?
- 6 B. Calculate and represent the indifference curves that pass through the bundles (x, y) = (1,1) and (x, y) = (1,2) of individuals whose preferences are represented by the functions of utility:Explain in detail what are indifference curve and what do they measure. What are the three characteristics of indifference curves, MRS, slope of IC curve and the budget line? What is budget line and what does it represent. Explain with formula and graph what is the point of consumer’s equilibrium, conditions of the equilibrium, and how does this equilibrium shift in (a) Income effect; (b) Price effect and (c) substitution effect and explain the pivot under price effect and under substitution effect. What is PCC?1. Refer to graph (multiple choice) graph represents Cara's budget constraint and preferences A. Refer to Graph, Which of the statements below is the most accurate? a. At point A, Cara's marginal valuation of leisure is higher than the market wage b. At point B, Cara's marginal valuation of leisure is higher than the market wage. c. At point B, Cara values leisure the same amount as at point A. d. At point A, Cara's marginal valuation of leisure is higher than the market wage, and at point B, Cara values leisure the same amount as at point A. B. Refer to Graph, At point A, Cara’s marginal rate of substitution of leisure for income a. exceeds the wage and Cara would like to work fewer hours. b. is less than the wage and Cara would like to work more hours. c. exceeds the wage and Cara would like to work more hours. d. is less than the wage and Cara would like to work fewer hours. C. Refer to Graph, Based on the graph above, we can conclude that a. Cara does not have…
