Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (2nd Edition)
2nd Edition
ISBN: 9780134641904
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 1, Problem 5Q
To determine
The representation of the budget constraint and explanation of trade-offs faced by consumers.
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Do you think the model of consumer equilibrium describes how people really make the decisions on what to order to in a restaurant to maximize their utility? Is there a better model to measure consumer choice?
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According to the principle of , consumers determine what is produced in the economy through their purchasing decisions.
Chapter 1 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (2nd Edition)
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Similar questions
- The slope of the budget constraint cannot change unless the budget amount changes. True or False?arrow_forwardDescribe in detail, explaining detail, and provide a matching drawing of your own budget constraint.arrow_forwardMarie has a weekly budget of $24, which she likes to spend on magazines and pies. If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week? If the price of a pie is $12, what is the maximum number of pies she could buy in a week? What is Marie’s opportunity cost of purchasing a pie? At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.arrow_forward
- Your budget line defines A) Consumption possibilities B) Production possibilities C) Societal demand for goods D) Unlimited incomearrow_forwardWhat can you use to establish whether a budget has been allocated to maximise total utility? Market equilibrium Budget line Consumer equilibrium Marginal utility Total utilityarrow_forwardBased on the figure attached, please answer below questions What this figure represents. Explain. How does the above curve illustrate the tradeoff we must make to increase food productionarrow_forward
- https://www.thesustainablefashionforum.com/pages/the-psychology-of-fast-fashion-exploring-the-complex-emotions-fast-fashion-evokes-in-consumers#:~:text=Despite%20its%20polarizing%20nature%2C%20having,ultimately%20leading%20to%20positive%20change. How does this article relate to economics? Such as marginal utility, consumption, substituibility, etcarrow_forwardShow how the budget constraint affects utility maximization.arrow_forwardUse this information to answer the following 4 questions: Marie has a weekly budget of $24, which she likes to spend on magazines and pies. If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?If the price of a pie is $12, what is the maximum number of pies she could buy in a week?Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?What is Marie’s opportunity cost of purchasing a pie?arrow_forward
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