EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9780100605930
Author: Blinder
Publisher: YUZU
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Chapter 5.A, Problem 3TY
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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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EBK ECONOMICS: PRINCIPLES AND POLICY
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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_forwardDonald derives utility from only two goods, carrots (X) and donuts (Y). His utility 0.1 0.9 function is as follows: U(X,Y) =X Y Donald has an income (M) of $900 and the price of carrots (P,) and donuts (P,) are $45 and $90 respectively Based on this information, what does the slope of the indifference curve for Donald tell us. Select one: A. For each additional quantity of carrot consumed, Donald must give up 0.25 of donuts to maintain the same level of satisfaction B. For each additional quantity of donuts consumed, Donald must give up 1/2 of carrots to maintain the same level of satisfaction C. For each additional quantity of carrot consumed, Donald must give up 1/2 of donuts to maintain the same level of satisfaction D. For each additional quantity of carrot consumed, Donald must give up 1/9 of donuts to maintain the same level of satisfaction E. For each additional quantity of donuts constumed. Donald must give up 1/2 of carrots to maintain the same level of satisfaction. F. For…arrow_forward
- Arthur 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_forwardDraw two indifference curves that represent Tom's preferences for sweet tea and burgers, given that he insists on consuming exactly one sweet tea for every two burgers that he eats. Then, using an arrow, show the direction in which utility is increasing. Q burgers Q sweet teaarrow_forwardIn analyzing consumer behavior, economists often use indifference curves to represent a consumer's preferences. An indifference curve shows the different combinations of two goods that provide the same level of utility to the consumer. As one moves along an indifference curve, the level of utility reflecting the consumer's willingness to trade off one good for another while maintaining the same level of overall satisfaction. A) Increases B) Decreases C) Remains constant D) Fluctuates unpredictablyarrow_forward
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