Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 3, Problem 2RQ
To determine
Relevance of indifference curve.
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Chapter 3 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17E
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- The following questions are independent of each other: Samir consumes apples and bananas and is in consumer equilibrium. The marginal utility from his last apple is 81 and the marginal utility from his last banana is 27. If the price of an apple is $0.90, then the price of a banana is $ As one moves up a typical indifference curve, how does the marginal rate of substitution change? It The marginal rate of substitution of X for Y is 5, the price of X is $4, and the price of Y is $7. A utility-maximizing consumer should choose X and Y. The first can of Coke gives 26 units of utility to Witney, while the second can of Coke increases her total utility to 38. The marginal utility of the second can of Coke is units.arrow_forwarddiscuss the three assumptions of indifference curves.arrow_forwardSuppose we have the following utility function: U(x,y)=x^O.33 y^0.67 1) What is the Marginal utility of x? Marginal utility of y? 2) Comment on how the marginal utility of each changes as x increases and discuss why that makes sense. 3) Does this utility function follow the more is better rule? How do you know? 4) What is the marginal rate of substitution (MRS)? What do we know about the shape of the indifference curve given this MRS? 5) Now suppose we have a new utility function: U(x,y)=x+y. What type of goods are these? Explain.arrow_forward
- What are indifference curves?arrow_forwardState the reason that why indifference curves never intersect each other. Furthermore, why higher indifference curves are preferred upon lower indifference curvesarrow_forwardif the utility function is given by u=x^2y^2 what is marginal utility?arrow_forward
- Explain what is meant by the Income and Substitution Effects? With the help of standard Indifference Curve analysis and appropriate diagrams, discuss the magnitude of the two effects given a change in the price of a good.arrow_forwardConsider indifference curves for the consumption of milk and chocolates (you may assume that both are "goods"). The indifference curves are drawn with the number of chocolate bars on the horizontal axis and pints of milk on the vertical axis. Suppose consumer A has a flatter indifference curve than consumer B. In this case, we can conclude that: a. Consumer A likes chocolate more than consumer B. b. The price of milk relative to the price of chocolates is higher for consumer A than for consumer B. с. The indifference curves of the two consumers cannot cross. d. Given the same amount of chocolates, consumer A is willing to swap one bar of chocolate for a smaller amount of milk than consumer B.arrow_forwardAssume that Sally likes hamburgers (made with beef) but neither likes nor dislikes vegetarian pasta (Assume that consumption of hamburger does not give Sally any positive or negative utility (satisfaction)). In effect, her total satisfaction (utility) depends solely on the quantity of Hamburgers and not on the quantity of vegetarian pasta. What would her indifference curve of hamburgers and vegetarian pasta look like? Please explain and draw the graph.arrow_forward
- Arthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a positive amount of satisfaction, but he is neutral as far as bread is concerned, i.e. He doesn't care if he consumes bread or not. Consuming bread does not give him positive or negative satisfaction. Please draw one of Arthur’s indifference curves for bread and chocolate, measuring bread on the vertical axis and chocolate on the horizontal axis.arrow_forwardHow do indifference curves represent the consumer's preferences?arrow_forward4. If we have the utility function, U(x)=(x−7)^2, and we know that there is an indifference set around x = 4 and an upper contour set of x = 6. How to graphically represent this function? I'm confused about how to draw the upper contour set on the graph? I know the concept that upper contour is the area over the convex line, but don't know how to put it on the graph. Could you draw a simple graph to help me identify the upper contour?arrow_forward
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