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
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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
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- The primary goal of very consumer is to maximize satisfaction. Explain, how a consumer achievesequilibrium using:a) Indifference curve analysisb) Marginal Utility theoryPareto 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.In ordinal Utility approach, let a consumer's utility function is given by TU X³Y. If price of X is 2 birr and price of Y is 3 birr and if budget of the consumer is 100 birr for consumption of X and Y. then what are the utility maximization X and Y?
- 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?Eren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).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?
- 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=2good a and b are perfect compliment i spend 80usd to buy them monthly, the price of the 2 goods are both - Pa = Pb = 10usd what should my indifference curve look like and can help elaborate more why does it look like that? Ps! Just wanted to understand more! Thanks!Explain 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 fulfil
- 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)b) Suppose a household is faced with the choice between consuming gasoline (G) and all other goods (OG). Today the household consumes 800 liter of gasoline a year. Suppose then that a gasoline price increase is perfectly compensated by a wage increase. If the family followed the utility maximization model, how would tis affect their consumption of gasoline? Explain by using a figure.