EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 7.A, Problem 1AP
To determine
The indifference curve and total utility.
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Assume that the data in the following table give an indifference curve for Mr. Chen. Graph this curve, putting A on the vertical axis and B on the horizontal axis. Assuming that the prices of A and B are $1.50 and $1, respectively, and that Mr. Chen has $24 to spend, add his budget line to your graph. What combination of A and B will Mr. Chen purchase? Does your answer meet the MRS = PB/PA rule for equilibrium?
Assume that the data in the accompanying table give an indifference curve for Mr. Chen. Graph this curve, putting A on the vertical axis and B on the horizontal axis. Assuming that the prices of A and B are $1.50 and $1, respectively, and that Mr. Chen has $24 to spend, add his budget line to your graph. What combination of A and B will Mr. Chen purchase? Does your answer meet the MRS = PB/PA rule for equilibrium?
Connie has a monthly income of $20.00 that she allocates among two goods:
meat (M) and potatoes (P).
Suppose meat costs $5.00 per pound and potatoes $2.00 per pound. Connie's
budget line (L₁) is drawn in the figure to the right.
Suppose also that her utility function is given by the equation U(M,P) = 2M + P.
What combination of meat and potatoes should she buy to maximize her utility?
pounds of
To maximize utility, Connie should buy pounds of meat and
potatoes. (Enter your responses rounded to two decimal places.)
Meat
8-
7-
6-
5-
3-
L₁
2-
1-
U₁
U₂
U3
e
10 11 12 13 14 15 16
Potatoes
When using the multipoint curve drawing tool, hit the key to end your line.
Chapter 7 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 7.1 - Prob. 1QQCh. 7.1 - Prob. 2QQCh. 7.1 - Prob. 3QQCh. 7.1 - Prob. 4QQCh. 7.A - Prob. 1ADQCh. 7.A - Prob. 2ADQCh. 7.A - Prob. 3ADQCh. 7.A - Prob. 1ARQCh. 7.A - Prob. 2ARQCh. 7.A - Prob. 1AP
Ch. 7.A - Prob. 2APCh. 7.A - Prob. 3APCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7P
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