not use ai please SHOW GRAPHS: Exercise 2With ounces of steak (S) on the horizontal axis and potatoes (P) on the vertical axis,graphically show indifferences curves representing the following preferences for Hank: (a) Hank must consume exactly 4ounces of steak per 1 potato. (Assume anything left over of either steak or potatoes can just be given to the dog.) (b)Hank likes steak and potatoes and prefers to have a good balance of both, but he won't turn down a large helping ofeither of them. (c) Hank does not like potatoes at all; the fewer the better for him. But he does like steak. (d) Hankneither likes nor dislikes potatoes, but he prefers more steak to less steak. (e) Hank is always happy to trade 2 ounces ofsteak for an extra potato. How is this different from part (a)?

Indifference curves (IC) illustrate combination of goods that give the consumer the same level of…

Answered: SHOW GRAPHS: Exercise 2 With ounces of…

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 2 Matt considers Butter (B) and Sour Cream (S) as substitutes. His utility function has the form u(B, S) = βB + S, where β > 0. Suppose the price of Butter is PB = 3, the price of Sour Cream is PS = 2, and Matt has an income of M = 100 dollars to spend between Butter and Sour Cream. (a) In a well labelled diagram, draw Matt’s indifference map, putting Butter on the x-axis and Sour Cream on the y-axis. Make sure to indicate the direction in which the indiffference curves increase. (b) In a well labelled diagram, draw Matt’s budget set indicating the intercepts with the axes and the slope of the budget line. (c) Obtain the Marginal Rate of Substitution between Butter and Sour Cream. What would happen to the MRS if Matt doubles his consumption of Butter and Sour Cream? (d) Obtain Matt’s optimal bundle when: – β > 3/2 – β < 3/2 – β = 3/2 (e) Now, suppose that the price of butter changes, whereas the price of sour cream and Matt’s income remain the same. The new price of…
8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. The BC shifts to the right (up).
The answer should be typed.
Question 1 Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles she has the happier she is, regardless of her consumption of Yo-yos. (a) Draw Bob's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (b) Draw Lucy's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (c) Do Bob's and Lucy's preferences comply with the property of diminishing marginal rate of substitution? (d) Are Bob's and Lucy's preferences transitive?
Graphical and Intuitive Optimization Consider a consumer who must allocate their available income between the consumption of two goods, Beer and Pizza. Their preferences over Beer and Pizza adhere to the usual assumptions we have made about preferences. The indifference curve map below reflects their preferences and the budget constraint reflects current income and prices. In the simplest terms possible, define or explain the term "Marginal Utility of Beer" (MUB). In the simplest terms possible, define or explain the term "Marginal Rate of Substitution of beer for pizza" (MRSBP). In the simplest terms possible, intuitively explain the meaning of MUB/PB, where PB represents the price of one unit of Beer.
Show full answers to a) b) & c)
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1. Mary has $100 to spend on goods X and Y. The price of Y is pY = $2.50. Mary has wellbehaved preferences and two of her indifference curves are shown on the above graph along with sometangent points. **This is a graphical problem. You may visually estimate (eyeball) any quantities you need.You may need to locate additional tangencies. a) Suppose the price of X is $1.25. On the graph above, label Mary’s budget line as (BLA) and label Mary’soptimal consumption bundle as bundle A. b) Now suppose the price of X rises to $5. On the graph above, label Mary’s budget line as (BLB) and labelMary’s optimal consumption bundle as bundle B. c) Next find the Hicks Compensated Bundle. To do this, put your ruler on budget line BLB and move yourruler in a parallel fashion until it just touches the indifference curve through bundle A. Label this tangencyas bundle C and draw the line tangent line, along with appropriate || parallel marks, and label this line asthe compensated budget line BLC. Please…
Suppose you have $100 to spend on Skittles and M&Ms. The price of Skittles is $5.00 and the price of M&Msis $1.00.(a) Write the budget constraint and draw the budget constraint on a graph that has M&Ms on the verticalaxis. (b) Assuming you spend all of your money on skittles and M&Ms. If you bought 10 M&Ms how manySkittles did you purchase? (c) Suppose the price of skittles increases from $5.00 to $6.00. Rewrite the budget constrain and draw thenew budget line, including and indicating intercepts and the slopes. (d) Suppose the price of Skittles drops from $5.00 to $1.00. You are limited to only a maximum of 75skittles. Draw this new budget constraint on the same graph from your answers in part (a) and (c).
Note: show gallons of gas & lbs of apples graph. The answer should be typed.
Use a coordinate system with ice cream measured on the horizontal axis and chocolate on vertical one to illustrate your preferences by plotting indifference curves if a) you like both ice cream and chocolate a lot. b) You like ice cream, but you hate chocolate c) You like ice cream, but you do not care (you are indifferent) about the chocolate
7) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of crackers declines? The BC shifts to the left (down). The BC shifts to the right (up). The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a lower point. The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a higher point.

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