If MRSx, y is constant at 5, then which of the following is false?wwwwwwwpoptions:The goods are perfect substitutes.The slope of the indifference curve is positive.For every unit of good x, the consumers are willing to give up 5 units of good y while remainingequally satisfied.The indifference curves are linear.

The marginal rate of substitution (MRS) is a key idea for understanding why people choose the things…

Answered: If MRSx, y is constant at 5, then which…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced at $2 per unit). The marginal utility of the fifth unit of X is 30, and the marginal utility of the sixth unit of Y is 18. If Mr. Rational is a utility maximizer, he should: buy less of X and more of Y. buy X and Y in the quantities indicated. buy more of X and less of Y. not buy anything. buy less of X and even lesser than that of Y.
Soppose Felix has 9dollars to spend on good x and y.The price ofgood Y is one.If consuming 6units of good y is utilitymaximizing,what must be the price of good x and the amount of goodx that he consumes for a utility function ofa.U=x^(1/3)y^(2/3)b.U=x+2yc.U=x+ln y
Along an indifference curve, if the marginal rate of substitution is 3, then the consumer is willing to Select one: a. Give up 3 units of the good measured along they-axis for 1 unit of income, that is, $1 of income. b. Give up 3 units of the good measured along they-axis for 1 unit of the good measured along the x-axis. c. Pay $3 for one unit of the good measured along the y-axis d. Give up 1 unit of the good measured along the y-axis for 3 units of the good measured along the x-axis e. Pay $3 for one unit of the good measured along the x-axis
Given that utility function for a consumer is given by u = (x-3)2 + (y-4)2, draw any twoindifference curves for this consumer while clearly labelling the higher one as ‘H’ and lower oneas ‘L’. Does he prefer more of a good to less of it? Does he prefer averages to extremebundles? Explain.
True, false, or undetermined?
When plotted Sarah's indifference curve for coffee and tea reveals parallel indifference curves that always have a slope of -1. Suppose that Sarah's budget constraint is 20 -1.5C+1.0T where C is the quantity of coffee and T is tea. If Sarah wants to maximize utility, she will buy: a) equal amount of coffee and tea b) coffee only c) tea only d) more coffee than tea e) a combination of coffee and tea cannot be determined from the information given
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.
Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is €2 per pound, the price of oranges is €3 per pound, and Bob's budget is $24 per week. What is Bob's utility maximizing choice between these two goods? A. 12 pounds of apples and no oranges B. 8 pounds of oranges and no apples C. 4 pounds of oranges and 6 pounds of apples D. 12 pounds of oranges and no apples Fiona uses her entire budget to purchase food and clothing. The price of food is €1 per unit and the price of clothing is €2 per unit. Fiona's marginal utility from food is 2 and her marginal utility from clothing is 6. She currently spends all her money on food and clothing. Her objective is to maximise her utility. Which of the following statements is correct? Fiona should buy more food and more clothing. A. B. C. D. E. Fiona is currently maximsing her utility and should continue to consume her current…

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