A consumer has the indifference map shown below. The market prices of X and Y are $20 and $50, respectively. The consumer has $500 to spend on goods X andY. For the utility-maximizing bundle, the marginal rate of substitution isthe slope of the budget line (in absolute value), and the ratio MU/P for good X isthe ratio MU/P for good Y.AY37,515101520253010Quantity of good Xgreater than, greater thangreater than; less thanless than, less thanequal to, equal toless than, greater thanQuantity of good

The market prices of X=$20 The market prices of Y=$50 The consumer has to spend=$500

Answered: greater than; greater than greater…

Business

Economics

greater than; greater than greater than; less than less than; less than equal to; equal to less than; greater than

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A consumer has the indifference map shown below. The market prices of X and Y are $20 and $50, respectively. The consumer has $500 to spend on goods X and
Y. For the utility-maximizing bundle, the marginal rate of substitution is
the slope of the budget line (in absolute value), and the ratio MU/P for good X is
the ratio MU/P for good Y.
AY
37,5
15
10
15
20
25
30
10
Quantity of good X
greater than, greater than
greater than; less than
less than, less than
equal to, equal to
less than, greater than
Quantity of good

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