Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
The
Which of these consumers are optimizing over their choices? Explain
For those who are not, how should they adjust their spending? Explain
“Pasta is Miguel’s favorite meal therefore the law of diminishing marginal utility does not apply”. Do you agree with this statement?
It is known that the indifference curve is convex. What does this tell you about the relationship between the goods?
The income effect and the substitution effect work in the same direction for a normal good. Explain how this differs for an inferior good.
Transcribed Image Text:Shoes
Michelle
12
Marginal Utility of
Marginal Utility of
Coffee
6
Renee
6
6
Douglas
6
3
Paul
3
6
Shannon
12
3
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