ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
14th Edition
ISBN: 9781337912396
Author: Baumol
Publisher: CENGAGE L
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Chapter 5.A, Problem 3TY
To determine
Explain what a slope of the indifference curve conveys about
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What information is contained in an indifference curve? Why are such curves (a) downward-sloping and (b) convex to the origin? Why does total utility increase as the consumer moves to indifference curves farther from the origin? Why can’t indifference curves intersect?
What information is contained in an indifference curve? Why are such curves (a) downsloping and (b) convex to the origin? Why does total utility increase as the consumer moves to indifference curves farther from the origin? Why can’t indifference curves intersect?
Define A consumer prefers a higher indifference curve to a lower one.
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ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
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- Explain the consumer equilibrium point by using Indifference Curve Approach and the Budget Line. What is the necessary condition for the consumer equilibrium? Explain why the consumer is not in equilibrium if this condition does not fulfill.arrow_forwardWhat information is contained in an indifference curve? Why are such curves (a) Downward sloping and (b) Convex to the origin Why does total utility increased as the consumers moves to an indifference curve farther from the origin? Why can't indifference curve intersect?arrow_forwardWhat are indifference curves?arrow_forward
- Consider indifference curves for the consumption of milk and chocolates (you may assume that both are "goods"). The indifference curves are drawn with the number of chocolate bars on the horizontal axis and pints of milk on the vertical axis. Suppose consumer A has a flatter indifference curve than consumer B. In this case, we can conclude that: a. Consumer A likes chocolate more than consumer B. b. The price of milk relative to the price of chocolates is higher for consumer A than for consumer B. с. The indifference curves of the two consumers cannot cross. d. Given the same amount of chocolates, consumer A is willing to swap one bar of chocolate for a smaller amount of milk than consumer B.arrow_forward1) Consider an indifference map which consists of vertical lines. What can you say about the consumer's preferences for these two goods? 2) How will the indifference map of this consumer change if the two goods are interchanged on the two axes? (That is, good earlier on the x-axis is moved to y-axis and good earlier on the y-axis is moved to x-axis.)arrow_forwardArthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a positive amount of satisfaction, but he is neutral as far as bread is concerned, i.e. He doesn't care if he consumes bread or not. Consuming bread does not give him positive or negative satisfaction. Please draw one of Arthur’s indifference curves for bread and chocolate, measuring bread on the vertical axis and chocolate on the horizontal axis.arrow_forward
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