Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 6.A, Problem 5SQ
To determine
The consumer equilibrium.
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The consumer is in equilibrium when
a)the budget line is tangent to the indifference curve at the bundle chosen.
b)All of the above.
c)MRT = MRS.
d)Px/Py = MUx/MUy
Given the budget line and indifference curvesshown in Exhibit A-6, assume the consumer isinitially at point C. To maximize total utility, theconsumer shoulda. purchase more of good X and less of good Y.b. remain at point C.c. move to point B and then to point A.d. purchase more of good Y and less of good X.
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.
Chapter 6 Solutions
Micro Economics For Today
Ch. 6.1 - Prob. 1YTECh. 6.1 - Prob. 2YTECh. 6.2 - Prob. 1YTECh. 6.A - Prob. 1SQPCh. 6.A - Prob. 2SQPCh. 6.A - Prob. 3SQPCh. 6.A - Prob. 1SQCh. 6.A - Prob. 2SQCh. 6.A - Prob. 3SQCh. 6.A - Prob. 4SQ
Ch. 6.A - Prob. 5SQCh. 6.A - Prob. 6SQCh. 6.A - Prob. 7SQCh. 6.A - Prob. 8SQCh. 6.A - Prob. 9SQCh. 6.A - Prob. 10SQCh. 6.A - Prob. 11SQCh. 6.A - Prob. 12SQCh. 6.A - Prob. 13SQCh. 6.A - Prob. 14SQCh. 6.A - Prob. 15SQCh. 6 - Prob. 1SQPCh. 6 - Prob. 2SQPCh. 6 - Prob. 3SQPCh. 6 - Prob. 4SQPCh. 6 - Prob. 5SQPCh. 6 - Prob. 6SQPCh. 6 - Prob. 7SQPCh. 6 - Prob. 8SQPCh. 6 - Prob. 9SQPCh. 6 - Prob. 10SQPCh. 6 - Prob. 1SQCh. 6 - Prob. 2SQCh. 6 - Prob. 3SQCh. 6 - Prob. 4SQCh. 6 - Prob. 5SQCh. 6 - Prob. 6SQCh. 6 - Prob. 7SQCh. 6 - Prob. 8SQCh. 6 - Prob. 9SQCh. 6 - Prob. 10SQCh. 6 - Prob. 11SQCh. 6 - Prob. 12SQCh. 6 - Prob. 13SQCh. 6 - Prob. 14SQCh. 6 - Prob. 15SQCh. 6 - Prob. 16SQCh. 6 - Prob. 17SQCh. 6 - Prob. 18SQCh. 6 - Prob. 19SQCh. 6 - Prob. 20SQCh. 6 - Prob. 21SQCh. 6 - Prob. 22SQCh. 6 - Prob. 23SQCh. 6 - Prob. 24SQCh. 6 - Prob. 25SQ
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- Given the indifference map and the budget line of the consumer, show with a diagram how does the consumer maximise utility. If A consumer has a MRS = 4/5 and price ratio =3/4, is he maximising his satisfaction? If not, suggest what he should do.arrow_forwardA 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? $arrow_forwardExplain the consumer equilibrium point by using Indifference Curve Approach andthe Budget Line. What is the necessary condition for the consumer equilibrium? Explain whyconsumer is not in equilibrium if this condition does not fulfilarrow_forward
- a. Define a budget line. b. Ilustrate and explain why indifference curves cannot intersect. c. With the use of a diagram, describe a consumer equilibrium.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_forwardIn comparing one market basket, A, to others to the northwest or southeast, we can say that a typical consumer will THE NORTHWEST AND SOUTHEAST ARE REFERRING TO THE POINTS ON A BUDGET CONSTRAINT AND INDIFFERENCE CURVE prefer A to any other market basket. prefer any other market basket to A. be indifferent between A and any other market basket in the Northwest or Southeast. be indifferent between some other market baskets in the Northwest or Southeast Only typed answer and don't use chat gptarrow_forward
- MRS=-20 along Ray 1 , MRS=-15 along Ray 2 Draw this consumer’s budget constraint, BAB, and indifference curve. Be sure to label your graph completely. Ignore all other indifference curves and bundlearrow_forwardExplain how Consumer Choice Theory helps explain decisions concerning the consumption of two goods. Further, discuss how Indifference Curves apply to this theory and the role played by the Budget Constraint. Note: apply the goods to inputs used in your fictitious business idea.arrow_forwardDaniela has $100 to buy supplies for her printer. The two items that she needs are inkcartridges and printer paper. Paper costs $10 for 1000 sheets, and ink cartridges cost $5 and must bereplaced aŌer 2000 sheets of paper.a. Sketch Daniela's budget line.b. What will her indifference curves look like?c. What will she buy?arrow_forward
- True / False questions Marginal utility curve is a graph shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently…… Indifference curve is a set of points, each representing a combination of some amount of good X and some amount of good Y, that all yield the same amount of total utility…..arrow_forwardTrue/False Marginal utility keeps falling with the each additional consumption of a good or service.arrow_forwardSuppose that a consumer has the indifference map shown above. The relevant budget line is LZ. The price of good X is $20.(a) What is the consumer’s income? Please show your calculations.(b) What is the price of good Y? Please show your calculations.(c) What is the slope of the budget line LZ. (d) What point in the graph will lead to utility maximizing with the budget line LZ and the indifference curves as shown above? Please label the point C. (e) What is the marginal rate of substitution (slope of the indifference curve) at the utility maximizing point you have shown in (d)?(f) Please explain why the consumer will not choose point A or point B.arrow_forward
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