Pizza O True 4 Coffee Refer to the Figure. This graph illustrates typical indifference curves. O False Indifference Curve 2 Indifference Curve 1
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- rosses Suppose a consumers budget set car be written as $200 = $5x + $10y (a) Draw the graph with an indifference curve showing that the consumer is in equilibrium and identify where the budget set cross both.x and Y axis. (b) Now, if there is an increase in the price of good.x, and both x and y are normal goods, graphically show the effect of the increases in P and identify what part of it is due to the substitute effect, and what part is due to the income affect. XFigure#4 Donuts ho Indifference Curve 3 Indifference Curve 2 Indifference Curve 1 Cae Refer to Figure#4. Which of the following statements is NOT true for a consumer who moves from point A to point C? the consumer is willing to sacrifice donuts to obtain cake at point C the consumer would be willing to give up a large number of cake in exchange for a donut than at point A O the consumer receives the same level of satisfaction at points A and C the marginal rate of substitution at points C and A are the same since the points lie on the same indifference curveChocolate Bars per week 50 40 25 20 15 10 0 1 2 E b 3 C 6 4 5 d 12 13 14 Budget Line 10 Pizzas per week Use the graphs above to answer the following questions. The graph shows a consumer's budget allocation toward chocolate and pizza per week and the indifference curves of various combinations of those goods. A. Compare points "e" and "f": which point yields more utility for the consumer? "e" and "f" yield the same utili B. Given the budget of this consumer, how many total pizzas can this consumer purchase per week? 10 C. If this consumer wanted to maximize utility by purchasing some combination of chocolate and pizzas, how many pizzas would this consumer purchase? 4
- 2. Draw a consumer's indifference curves for orange juice and chicken rice . Describe and explain four properties of these difference curves.The following table shows Ellie's utility from consuming slices of cake and cans of 7- Up. 5- Marginal Utility from Last Slice Slices Cans Marginal Utility from Last Can 4.5- of of Cake 7- Up 4- - 120 100 1 120 3.5- 2 60 3- 80 45 4 60 4 30 2.5- 40 5 20 6. 20 6 15 2- Suppose Ellie has $3 per week to spend on cake and 7- Up and that the price of a slice of cake is $0.50. 1.5- 1- 1.) Use the point drawing tool to plot Ellie's demand for 7- Up at a price of $0.50. Label this point 'A'. 0.5- 0- 2.) Use the point drawing tool to plot Ellie's demand for 7- Up at a price of $1.00. Label this point 'B'. 2 3 4 Quantity of 7-Up 3.) Use the line drawing tool to connect the dots to form Ellie's demand curve. Properly label this line. Carefully follow the instructions above, and only draw the required objects. O -2 3 Price of 7-Up4. The following questions refer to the following graph of a consumer's indifference curve. a. b. Quantity of Y 40 30 20 10 0 T I A 10 C B 1 20 30 40 Quantity of X X What is the consumer's marginal rate of substitution between points A and C? At point C, approximately what is the consumer's marginal rate of substitution at point?
- The initial budget constraint (BC₁) shows the Steins' budget constraint when the price of a fancy dinner is $100. At this price, Larry and Megan would choose to consume five fancy dinners. Suppose that the price of a fancy dinner decreases to $50, shifting their budget constraint to BC₂, which represents a new relative price of five diner breakfasts per fancy dinner. (Hint: The blue line labeled H is parallel to BC₂ and tangent to I₁ at point S.) In order to remain as happy as they were before the price decrease-that is, to consume at some point on the same indifference curve as they were on initially (1₁)-the Steins' income spent on fancy dinners and breakfast at diners would now only have to be $ . However, in reality, rather than maintaining their original level of utility, the Steins choose the optimal bundle along their new budget constraint. At this point, they are off than before the price change in fancy dinners. On the following table, indicate which point movement represents…12 2 4 6 8 Water (bottles per day) The figure above shows three of a consumer's indifference curves. Which point is most preferred? Point Conly Point Gonly Point Jonly Points Cand G are tied for the most preferred. More information is needed to determine which point is most preferred. 2.In your own words, explain what indifference curves are. Give 4 properties of indifference curves.
- MCQ question 6 Thandi consumes pancakes and apples. Thandi's utility increases with the consumption of pancakes, but her utility neither increases nor decreases with the consumption of apples. Assuming apples are on the x-axis and pancakes are on the y-axis, what do Thandi's indifference curves look like? O A. downward-sloping lines B. L-shaped lines O C. horizontal lines D. upward-sloping lines from the origin O E. vertical linesPage of 3 > Due November 1, 2 Press Esc to exit full screen A. Jack enjoys a cup of cappuccino every morning, which is made with equal parts of steamed milk (m) and espresso(e). Suppose Jack's utility function U(m, e) = min(m, e). Graph Jack's indifference curves when U = 4 and U = 8. B. Leslie buys 2 goods: z and y. His utility function is U(z,y) = 5x+3y. 1. Plot this consumer's indifference curves when U = 15 and U = 20. What is the shape of Leslie's indifference curves? 3. For Leslie, how are these two goods related? C. Leslie's friend Tim has a different utility function for the same goods U(x, y) = √zy. 1. Plot this consumer's indifference curves when U = 15 and Ū = 20. 2. What is the shape of Tim's indifference curves? D. A consumer's utility function for goods 2 and y is U(z,y) = x+2y. 2. 1. Calculate the consumer's marginal utility for each good at (2,2) (Hint: marginal utility represents the amount of utility the consumer gains by consuming one more unit of this good. You can…The marginal rate of substitution is the slope of an indifference curve. O True O False