There can be more than one correct answer. The marginal utility of the last unity of X1 consumed increases The consumer will farther to the right on the original indifference curve The consumer will be on a higher indifference curve The marginal utility of the last unity of X1 consumed decreases

There can be more than one correct answer. The marginal utility of the last unity of X1 consumed increases The consumer will farther to the right on the original indifference curve The consumer will be on a higher indifference curve The marginal utility of the last unity of X1 consumed decreases

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

Marginal Rate of Technical Substitution

MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.

Preferences and Utility Analysis

Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.

Question

Draw yourself a budget constraint and indifference curve with a tangent "optimal bundle". Now
lower the price of X1 (x-axis).
Which of the following is true the new optimal bundle for the typical consumer?
There can be more than one correct answer.
The marginal utility of the last unity of X1 consumed increases
The consumer will farther to the right on the original indifference curve
The consumer will be on a higher indifference curve
The marginal utility of the last unity of X1 consumed decreases

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