Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 21, Problem 2CQQ
To determine
The point indicated by slope of the indifference curve.
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A consumer’s budget set for two goods (X and Y) is 500 ≥ 4X + 5Y.a. The budget set is illustrated below. What are the values of A and B?
The horizontal axis is labeled Good X. The vertical axis is labeled Good Y. A line begins at a point on the vertical axis goes down to the right and ends at a point on the horizontal axis.
A =
B =
b. Does the budget set change if the prices of both goods double and the consumer’s income also doubles?
multiple choice
Yes, it rotates clockwise
Yes, it shifts out from the origin
Yes, it shifts in toward the origin
No, it does not change
c. Given the equation for the budget set, what are the prices of the two goods?Good X: $ Good Y: $
What is the consumer’s income?
$
gd A and good b: perfect compliment
i buy $80 on good a and b monthly
the pricing of the 2 gds are Price a = price b = $10
How will my indifference curve look like in a graph? And why does it look like it? And how do I add a budget line to it?
how do I add the optimal bundle if I need to find the amount of good a and b I choose to buy?
A consumer has initial income of $100 and face prices Px=$1 and Py=$5. Graph the budget line, and show how it changes when the price of good X increases to Px’=$5. what happens when income increases from 100 to 200$
Chapter 21 Solutions
Principles of Economics (MindTap Course List)
Ch. 21.1 - Prob. 1QQCh. 21.2 - Prob. 2QQCh. 21.3 - Prob. 3QQCh. 21.4 - Prob. 4QQCh. 21 - Prob. 1CQQCh. 21 - Prob. 2CQQCh. 21 - Prob. 3CQQCh. 21 - Prob. 4CQQCh. 21 - Prob. 5CQQCh. 21 - Prob. 6CQQ
Ch. 21 - Prob. 1QRCh. 21 - Prob. 2QRCh. 21 - Prob. 3QRCh. 21 - Prob. 4QRCh. 21 - Prob. 5QRCh. 21 - Prob. 6QRCh. 21 - Prob. 7QRCh. 21 - Prob. 1PACh. 21 - Prob. 2PACh. 21 - Prob. 3PACh. 21 - Prob. 4PACh. 21 - Prob. 5PACh. 21 - Prob. 6PACh. 21 - Prob. 7PACh. 21 - Prob. 8PACh. 21 - Prob. 9PACh. 21 - Prob. 10PACh. 21 - Prob. 11PACh. 21 - Prob. 12PA
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- A consumer has initial income of $100 and faces prices of Px = $1 and Py = $5. Graph the budget line, and show how it changes when the price of good X increases to P1x = $5 .arrow_forwardExplain consumer equilibrium with the help of indifference curve. Also discuss the practical importance of law of diminishing and law of equi-marginal utility?arrow_forwardDraw indifference curves that reflects the following preferences. A. Pizza and Pepsi B. Potatoes and Rice C. Income and Polluted Water. D. Consumer like Strawberries and dislike carrotsarrow_forward
- Consumer utility function is, Uxy = 10 x1/2 y1/2. The price of X good 10 AZN and Y good 20 AZN. If consumer income is 500 AZN, find and show graphic description how much consumer can buy X and Y good.arrow_forwardExplain consumer equilibrium with the help of indifference curve. Also discuss the practical importance of law of diminishing and law of equi-marginal utility ? Please please answer that please early pleasearrow_forwardAt any point on an indifference curve, the slope of the curve measuresthe consumer'sa. income.b. willingness to trade one good for the other.c. perception of the two goods as substitutes or complements.d. elasticity of demand.arrow_forward
- Explain consumer equilibrium with the help of indifference curve. Also discuss the practical importance of law of diminishing and law of equi-marginal utility? Please please answer that please early please total answer this question pleasearrow_forwardK A budget line is a line that describes limits to consumption possibilities and that depends on a consumer's OA. demand; prices B. demand; supply C. budget; costs D. budget; prices and of goods and services.arrow_forwardAs the price of a good rise, the consumer will experience Select one: a. a southwesterly movement on the indifference map b. a desire to consume a different combination of goods c. all choices d. a decrease in utilityarrow_forward
- Mark is in front of an automatic soft drink machine. The machine needs specific money and does not give change. You need 2 coins of 50 cents and 1 of 20 cents. No other combination gives a soft drink. Draw some indifference curves to the coins Mark holds to consume soft drinks. A. If he has 2 coins of 50 cents and 1 of 20 cents he will get a soft drink. If he has 4 coins of 50 cents and 2 of 20 cents, how many soft drinks will he get? B. Draw in red the area where Mark is indifferent to the combination of 2 coins of 50 cents and 1 of 20 cents. Draw in blue the area where Mark is indifferent to the combination of 4 coins of 50 cents and 2 of 20 cents. C. Does it have curved preferences between 50 cent and 20 cent coins? D. Does Mark always prefer more than both coins?arrow_forwardGive 5 examples each of inferior goods and normal goodsarrow_forward
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