Good X B - ICz A - IC • E Good Y Moving from B to D, the person is giving up Good X and getting Good Y. Whether the person prefers B over D depends on whether he values the extra Y more than the X he loses. D must be on a lower indifference curve than B. Bis preferred to D. O Any bundle of goods on IC2 is preferred over any bundle of goods on IC1. O If a person moves from a bundle on IC1 to a bundle on IC2 he is happier.

Good X B - ICz A - IC • E Good Y Moving from B to D, the person is giving up Good X and getting Good Y. Whether the person prefers B over D depends on whether he values the extra Y more than the X he loses. D must be on a lower indifference curve than B. Bis preferred to D. O Any bundle of goods on IC2 is preferred over any bundle of goods on IC1. O If a person moves from a bundle on IC1 to a bundle on IC2 he is happier.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1 . Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? Assume the government imposes an effective minimum wage (i.e., one above the equilibrium wage rate that would otherwise prevail in that market). Our supply and demand analysis implies? If preferences for pizza increase and the price of labor to produce pizza decreases, the equilibrium quantity of pizza will ____ and the equilibrium price of pizza will _____ .? Assume an intertemporal budget constraint that shows how consumption can be traded off between…
For each of the following situations, decide whether the bundle Lakshani is considering is optimal or not. If it is not optimal, how could Lakshani improve her overall level of utility? That is, determine which good she should spend more on and which good she should spend less on. Lakshani has $200 to spend on sneakers and sweaters. Sneakers cost $50 per pair, and sweaters cost $20 each. She is thinking about buying 2 pairs of sneakers and 5 sweaters. She tells her friend that the additional utility she would get from the second pair of sneakers is the same as the additional utility she would get from the fifth sweater. Lakshani has $5 to spend on pens and pencils. Each pen costs $0.50 and each pencil costs $0.10. She is thinking about buying 6 pens and 20 pencils. The last pen would add five times as much to her total utility as the last pencil. Lakshani has $50 per season to spend on tickets to football games and tickets to soccer games. Each football ticket costs $10 and each…
Suppose that a there are two goods, X and Y. The price of Good X is $5 and the price of Good Y is $10. The seller of Good X offers a deal where if a consumer buys 1 unit of Good X they pay full price, but the second unit of Good X is only $3. Calculate the slope of the budget constraint between 1 unit of Good X and 2 units of Good X.
Binta always consumes Chick-fil-A chicken with Chocolate Milkshake, she will only have some utility if she consumes them together. If Chick-fil-A lowered the price of their chicken, and Binta change her consumption bundle accordingly. Part of this change is due to income effect and the other part is due to substitution effect. True False
Troy likes games (Good X) and books (Good Y). Based on the number of games and books in his current bundle, he marginal utility for another game is 6 and the marginal utility for another book is 2. If the price of a game is $10 and the price of a book is $5, then which of the following statements is true? Select one: a. Troy's utility could be higher with more books and less games. b. Troy would have a higher utility if he bought equal quantities of books and games. c. Troy's utility is already maximized with the combination of games and books that he has. d. Troy's utility could be higher with more games and less books.
4please answer part a and b of quesrion #1
Please by your own words
A date with Alex costs you $100 and gives you an additional 1000 units of utility. A date with Kelly costs you $200 and an additional 4,000 units of utility. Based only on the information you have, using the theory of rational choice, you most likely would: O be indifferent between the two dates O go on a date with Alex because the marginal utility per dollar is the greater of the two O go on a date with Kelly O go on a date with Alex
3px Sam has utility over goods x and y. His consumption of x is . What is his consumption of y? Oa. y = 3Pr b. y = 3py 2PY I О с. y = 3px Px I O d. y = 2 3-PY I O e. y = 3Py
12 There are two goods and John's preferences can be represented by u: R²0 R given by u(x) = x₁³x2³. His income and price of the two goods are given by (M, P1, 20 P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve. In John's optimal bundle, he spends the same amount on good 1 as good 2. John's preferences satisfy local non-satiation. At John's optimal bundle, his bang per buck of good 1 equals his bang per buck of good If we change John's utility function to u(x) = In (17 +x₁x₂) then John's optimal bundle remains unchanged. If we change the budget set to (M, P1, P2) = (24, 2, 4) then John's optimal bundle remains unchanged.
The utility-maximizing bundle of x and x2may, in some instances, be found at a point of tangency between the budget line and an indifference curve. In other instances, the utility-maximizing bundle will be found at a corner point-that is, where the quantity consumed of one good is zero. For which types of indifference curves shown below will the utility-maximizing bundle definitely be found at a corner point? Choose one or more: A. B. "C. D.