onsider the following graph and state which one is not true: a) The individual has an income of m. b) If price of X decreases the individual will be on a higher indifference curve. c) The individual buys equal quantities of Y but higher quantities of X after the price of X decreases. d) The individual buys more quantities of x and y afte

Q: Further assume that the price of good x, px = $6, the price of good y, py = $8 and the individual…

A: Utility: It refers to the maximum satisfaction which a consumer gets from the purchase of the goods…

Q: The elementary school has one candy machine in the cafeteria.   Candy at the vending machine costs…

A: An indifference curve, with respect to two commodities, is a graph showing those combinations of the…

Q: renc

A: Utility is being defined as a want which satisfies the capacity of the commodity.

Q: At each point on an indifference curve:             total utility is the same.             the…

A: The indifference curve analysis is based ordinal measurement of utility.  Ordinal measurement of…

Q: Please draw the indifference curve of u(x1,x2) = max {x1,x2} in the graph. Also please try to make…

A: We have utility function  u(x1,x2) = max {x1,x2}

Q: With reference to the indifference theory with good Y on the vertical axis and good X on the…

A: Indifference curve is the graph which shows the two combinations Of two goods which gives equal…

Q: Why Indifference curve of a rational consumer cannot be parallel to x-axis and y-axis?

A: Indifference curve shows the different possible combination of two goods that gives the same level…

Q: sam's utility over x and y is given by the U= 10x.y. The marginal utility of each good is given by :…

A: An indifference curve is an outline showing different blends of two merchandise or wares that leave…

Q: Suppose that you have an income of $20 to spend on sticky hands and gumballs. Both cost $1.00.…

A: Answer: The new budget constraint is given below: Let the sticky hands is shown on y-axis and…

Q: Tim consumes pizza (P) and soda (S). Consider the following 4 possible market bundles: A: P=0.5 S=3…

A: Tim consumes pizza (P) and soda (s). Consider the following 4 possible market bundles: Bundle…

Q: The figure below shows one of Josie's indifference curves between peaches and cream-the indifference…

A: Josie's income=$32Price of peaches=$4Price of cream=$4Now,Maximum peaches Josie can…

Q: You are graphing Mickey's indifference curve over steak and chicken. He likes both of them and his…

A: All commodity bundles with the same utility level are shown by the utility function. A graphical…

Q: How would you describe the relationship between two goods X and Y if the indifference curve was…

A: An indifference curve is a graphical representation of all combinations of two goods or commodities…

Q: If the price of one of the products is associated with indifference curves increase, all else the…

A: Answer - If the price of one of the products is associated with the indifference curves increase,…

Q: 4.13 Suppose that George is interested in only two goods, cigars and scotch. Employ the indifference…

A: An indifference curve is a graphical representation used in economics to depict a combination of two…

Q: g. Suppose you are told that after the price increase, the highest level of utility Alex can enjoy…

A: The utility function is the mathematical relationship between the utility and different bundles of…

Q: Consider the following equation for an indifference curve: y = 20/x. At point A (2, 10), the MRS is?

A: The indifference curve shows us the consumption of two commodities that are consumed by the consumer…

Q: Let Pp denote the price of pizza, and let Ph denote price of hamburgers.  In addition, let MUp…

A: An indifference curve shows a combination of two goods in various quantities that provides equal…

Q: discuss the three assumptions of indifference curves.

A: "Utility is the usefulness of a commodity for the consumer." When the consumer derives the same…

Q: Norman and Gina consume food and clothing. In particular, Norman currently consumes 4 units of food…

A: An indifference curve is a graphical representation used to show different combinations of two goods…

Q: Eliza is a seven year old who loves chocolate and is neutral about any other food (ie. she gains no…

A: # Eliza is neutral about any other good and she loves chocolate.  # P(chocolate) = $1 , M (income) =…

Q: Consider that there are two goods, good X and good Y. a) Give the definition of "indifference curve"…

A: In economics, the term "consumer preference" refers to the decisions that consumers make to maximise…

Q: Consider an individual who decides to allocate time between different activities. For simplicity…

A: The work-leisure model represents the trade-offs between working hours and leisure hours. Given…

Q: Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the…

A: In the case of perfect substitutes, the consumer would spend all of her budget on that good which…

Q: Explain the derivation of the demand curve of a consumer using the indifference curve theory.

A: At the utility-expanding arrangement, the consumer's marginal pace of replacement (the total worth…

Q: Consider a budget line drawn with apples on the vertical axis and oranges on the horizontal axis.…

A: Initial Income = 100 Price of Apple = 5 Price of Orange = 10   Income decreases to 75

Q: Use the image 2.2 below to answer this question. The slope of the indifference curve is given by…

A: Marginal utility describes the benefits or utility obtained from consumption of a commodity. It is…

Q: Derive the relationship between the quantity of X demanded and the price of X if the consumer’s…

A: The utility function refers to all those commodity bundles that derive the same amount of utility…

Q: Michael and Kelly consume food and clothing. In particular, Michael currently consumes 19 units of…

A: Indifference curves are heuristic instruments that are utilized in modern microeconomics to…

Q: The Chairman or Chairlady or Fed Chair (a politically correct term) of the Federal Reserve Bank has…

A: Federal Open Market Committee:A policy-making body within the Federal Reserve System responsible for…

Q: Suppose Coffee and Tea have a perfect substitute indifference curve, with Coffee on the X-axis and…

A: Perfect substitutes are those commodities which can be used in place of one another. For example,…

Q: Given the indifference map and the budget line of the consumer, show with a diagram how does the…

A: Taking  MRS = MU1/ MU2 and price ratio = P1/P2. Satisfaction is maximized when MRS = Price ratio.

Q: Shelly purchases milk and cookies at the local supermarket. She has regular shaped strictly convex…

A: Shelly consumes 2 goods, milk (X), and cookies (Y). The prices of cookies and milk are $4 each. The…

Q: Michael and Kelly consume food and clothing. In particular, Michael currently consumes 23 units of…

A: Indifference curves are heuristic instruments that are utilized in modern microeconomics to…

Q: For Mary, shampoo and conditioner are perfect complements. She likes to use 1 squirt of shampoo and…

A: For Mary, shampoo and conditioner are perfect complements.  1 squirt of shampoo is used with 1…

Q: Suppose an individual has the following utility function: U(x,y)=−4(x−5.5)^2 −2(y−3.5)^2 Further…

A: Utility: It refers to the maximum satisfaction which a consumer gets from the purchase of the goods…

Q: assume that the data in the following table are an indifference curve for a consumer: what is the…

A: Indifferent curve shows the different possible combination of goods nd services that give the same…

Marginal Rate of Technical Substitution

MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.

Preferences and Utility Analysis

Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.