Loose-leaf Microeconomics With Connect Access Card
2nd Edition
ISBN: 9780077716325
Author: B. Douglas Bernheim Lewis & Virginia Eaton Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 5P
(a)
To determine
Fill in the table using the Utility for corresponding bundles.
(b)
To determine
Explain the formula for ‘R’ indifference curves.
(c)
To determine
Explain whether individual ‘R’ preferences satisfy the More –Is –Better principle.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Let Pp denote the price of pizza, and let Ph denote price of hamburgers. In addition, let MUp denote the marginal utility of pizza, and let MUh denote the marginal utility of hamburgers. On a graph with pizza on the x-axis and hamburgers on the y-axis, the slope of the consumer's indifference curve is
MUp/MUh
Ph/Pp
MUh/MUp
Pp/Ph
Draw Shahab’s budget constraint if he has income/ budget of Rs. 1000 which he can spend on buying Pizzas and Pepsi cans ( Price of a Pizza is Rs.100 and price of a can of Pepsi is Rs.20)
Draw Shahab’s Indifference curves for Pizzas and Pepsi Cans. What does the slope at any point on these curve represent? Why would Shahab prefer to be on higher indifference curve than a lower one? Why do the curves slope downwards? Why do these curves never intersect? Why are the curves bowed inwards?
Draw and interpret Shahab’s indifference curves for 10 rupee notes and 20 rupee notes and his indifference curves for Left and right shoes.
Suppose a consumer views two goods, X and Y, as perfect complements. Her utility function is given by U = MIN [2X, Y]. Sketch the graph of the consumers indifference curve that goes through the bundle X = 7 and Y = 8. Put the amount of Y on the vertical axis, and the amount of X on the horizontal axis. Which of the three assumptions that we made about consumer preferences is violated in this case?
Chapter 4 Solutions
Loose-leaf Microeconomics With Connect Access Card
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Find utility functions given each of the following indifferencecurves [defined by U()=k ]: a. z=k1/x/y/ b. y=0.5x24(x2k)0.5x c. z=y44x(x2yk)2xy22xarrow_forwardIsn't the utility function is perfect complement: min{} and the indifference curves should be L-shaped instead of convex and concave?arrow_forwardDiogo has a utility function where A, α, and ß are constants, B is burritos, and Z is pizzas. If the price of burritos, , is $2 and the price of pizzas, is $1, and Y is $100, what is Diogo’s optimal bundle? Carrow_forward
- Assume that the data in the following table are an indifference curve for a consumer: a. graph this indifference curve and label "Quantity of Y" on the vertical axis and Quantity of X" on the horizontal axis. Label the points A-D. b. Assume the consumer's budget is $12 and the price of X and Y are $1.00 and $1.50, respectively. Draw the budget line in the above graph. c. what combination of X and Y will the consumer purchase? d. What is the value of the MRS and the slope (Px/Py) at consumer equilibrium? e. Beginning with the graph drawn in part (a), explain and draw graphs to derive demand curve for X Choice units y units of x A 10 2 B 6 4 C 4 6 D 2 12arrow_forwardJohn has preferences for food F and clothing C described by a utility function . Suppose that food costs $1 a unit and that clothing costs $2 a unit. John has $12 to spend on food and clothing. On a graph, draw indifference curves corresponding to , , . Make sure to label coordinates clearly. Using the graph, find the optimal choice of food and clothing. Let the amount of food be on the horizontal axis and the amount of clothing be on the vertical axis. What is the marginal rate of substitution of food for clothing at his optimal basket? Show this graphically and algebraically. Suppose John decides to buy 4 units of food and 4 units of clothing with his $12 budget. Would his marginal utility per dollar spent on food be greater than or less than his marginal utility per dollar spent on clothing? What does this tell you about how he should substitute food for clothing if he wanted to increase his utility without spending any more money?arrow_forwardSophia’s preferences over donuts (D) and coffee (C) are represented by the utility function: u(D,C)=min(2D,C). Draw two indifference curves representing these preferences. In which ratio is she consuming donuts and coffee?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning