Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 21, Problem 2QR
To determine
The indifference curves for wine and cheese and the properties of indifference curves.
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Chapter 21 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 21.1 - Prob. 1QQCh. 21.2 - Prob. 2QQCh. 21.3 - Prob. 3QQCh. 21.4 - Prob. 4QQCh. 21 - Prob. 1QRCh. 21 - Prob. 2QRCh. 21 - Prob. 3QRCh. 21 - Prob. 4QRCh. 21 - Prob. 5QRCh. 21 - Prob. 6QR
Ch. 21 - Prob. 7QRCh. 21 - Prob. 1QCMCCh. 21 - Prob. 2QCMCCh. 21 - Prob. 3QCMCCh. 21 - Prob. 4QCMCCh. 21 - Prob. 5QCMCCh. 21 - Prob. 6QCMCCh. 21 - Prob. 1PACh. 21 - Prob. 2PACh. 21 - Prob. 3PACh. 21 - Prob. 4PACh. 21 - Prob. 5PACh. 21 - Prob. 6PACh. 21 - Prob. 7PACh. 21 - Prob. 8PACh. 21 - Prob. 9PACh. 21 - Prob. 10PACh. 21 - Prob. 11PACh. 21 - Prob. 12PACh. 21 - Prob. 13PA
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- If we consume an additional unit of goods when utility is maximum, the utility we get from this additional unit is (positive, negative or zero)? Choose one why?arrow_forwardExplain three assumptions about the properties of consumers’ preferences.arrow_forwarddraw a budget constraint and indifference curves for pizza and pepsi .show what happens to budget constraint and consumer's optimum when the price of pizza rises .in your diagram, decompose the change into an income effect and a substitution effectarrow_forward
- Draw two indifference curves that represent Tom's preferences for sweet tea and burgers, given that he insists on consuming exactly one sweet tea for every two burgers that he eats. Then, using an arrow, show the direction in which utility is increasing. Q burgers Q sweet teaarrow_forwardDiminishing 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?arrow_forwardThe above figure shows your budget line and indifference curves. What quantities of gasoline and movie rentals would you choose?arrow_forward
- What is the law of diminishing utility? Please explain with a few examples.arrow_forwardThe marginal utility for shoes and coffee is given below for five individuals. A pair of shoes costs $2, and a cup of coffee costs $1. 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.arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forward
- Illustrate and explain how consumer equilibrium is achieved using the indifference curve?Discuss how the demand elasticity of a product changes? Give examples.arrow_forwardDraw a consumer’s indifference curves for pizza and coke. Describe and explainproperties of these indifference curves.arrow_forwardAssume that you only buy two goods, fish and Fanta soda. You are analyzing your personal consumption for the two goods. Assume that you have a weekly budget of $80, fish costs $5 per Ib and Fanta costs $2 a soda. a. Draw your budget line with Fanta on the y-axis. Calculate the x and y intercepts as well as the slope of the budget line. Include your personal indifference curve to show your optimal consumption between the two goods (assume that your indifference curve is such that you consume positive values of each good). 3. Assume that the price of fish falls from $5 per Ib to $4 per Ib. On a new graph draw the change in price along with the new intercept(s) and new optimal consumption point.arrow_forward
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