Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently$30). Their Indifference curves are given in the graph below.a) To get the highest utility consistent with their budget, this person will buypairs of shoes and4 concert tickets.b.) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a.Shoes1614121086422Tickets10 12 1416ToolsBudget Line

Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30) Their indifference curves are given in the graph below. pairs of shoes and concert tickets. a) To get the highest utility consistent with their budget, this person will buy [ b) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a Shoes 16 14 12 10 8 4 2 2 8 Tickets 10 12 14 16 Tools Budget Line

Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30) Their indifference curves are given in the graph below. pairs of shoes and concert tickets. a) To get the highest utility consistent with their budget, this person will buy [ b) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a Shoes 16 14 12 10 8 4 2 2 8 Tickets 10 12 14 16 Tools Budget Line

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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what is A curve showing combinations of two goods that provide a consumer with a constant amount of utility ?
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Please answer both Thank you
3. You have an income of $24 per week and the only two goods you consume are apples (x1) and orange juice (x2). The price per apple is $4 and the price of a bottle of orange juice is $3. Suppose that your weekly optimal consumption bundle is 4 bottles of orange juice and 3 apples . a. Illustrate this in a graph using indifference curves and budget lines. Be sure to fully label the graph. b. Write down the conditions for utility maximization and relate this to the graph that you drew. c. Now suppose that the price of apples falls to $2, and I take enough money away from you such that you are just as well off as you were before, will you buy more of fewer bottles of orange juice? Explain why or why not in words and with a graph. (Hint: think about income and substitution effects
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When does marginal utility become 1) Negative 2) zero Explain
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4. Suppose your preferences are reflected in the indifference map shown. A burger costs $100 and a slice of pizza sells for $50. You have a food budget of $500 per week. a) How many burgers and slices of pizza will you consume in a typical week? Explain your choice. Demonstrate the effect on your consumption choice if pizza falls in price. b) 18 16 14 12 10 8 6 4 2 Burgers 2 1 3 4 5
Diminishing Marginal Utility. Explain the law of diminishing marginal utility Discuss an instance where you have experienced this. Do consumers continue to purchase something even though its marginal utility is decreasing? Why or why not?
i) Derive consumer's budget constraint ii) Derive the marginal utility X and marginal utility Y iii) Find out the consumer optimum combination of good X and Y at the market.
5. Julio who consumes two goods Food (F) and clothing (C) has a utility function given by U(F,C)= sqrt(F)C. The price of food is $3 and the price of clothing is $5 and Julio's weekly budget for food and clothing is $100. a. What is Julio's MRSFe (marginal rate of substiution of food for clothing) when utility is maximized? Explain. b. If Julio is at point where MRSFC= 1, where is that point relative to the utility maximzing bundle (show this in a diagram)? c. Can Julio change his bundle so as to increase his satisfaction and if so in what way? Explain fully Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.