Suppose the consumer initially maxizes utility on budget line L¹ at bundle e,. This is where the consumer consumes if he does not receive any gifts. 1.) Now assume the consumer has the same budget as previously but receives some gifts equal to Q₂ gift goods. Where does he now consume? Using the point drawing tool draw and label this bundle 'e₂. 2.) Now assume the consumer receives cash instead of gifts which pushes his budget line out to L³. Where does he now consume? Using the point drawing tool draw and label this bundle '03. CODE All other goods 32

Suppose the consumer initially maxizes utility on budget line L¹ at bundle e,. This is where the consumer consumes if he does not receive any gifts. 1.) Now assume the consumer has the same budget as previously but receives some gifts equal to Q₂ gift goods. Where does he now consume? Using the point drawing tool draw and label this bundle 'e₂. 2.) Now assume the consumer receives cash instead of gifts which pushes his budget line out to L³. Where does he now consume? Using the point drawing tool draw and label this bundle '03. CODE All other goods 32

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Please solve Correct i give 2 like.

now consume? Using the point drawing tool draw and label this
bundle 'e₂.
2.) Now assume the consumer receives cash instead of gifts which
pushes his budget line out to L³. Where does he now consume?
Using the point drawing tool draw and label this bundle 'e.'
Carefully follow the instructions above and only draw the required
objects.
Compared to the equivalent amount of cash, the gift creates
All other goods
Q₂
Q. Gift goods

Suppose the consumer initially maxizes utility on budget line L¹ at
bundle e₁. This is where the consumer consumes if he does not
receive any gifts.
1.) Now assume the consumer has the same budget as previously
but receives some gifts equal to Q₂ gift goods. Where does he
now consume? Using the point drawing tool draw and label this
bundle 'e₂.
2.) Now assume the consumer receives cash instead of gifts which
pushes his budget line out to L³. Where does he now consume?
Using the point drawing tool draw and label this bundle '83.
(TTD)
All other goods
32
O
O

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