The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

In economics, the cost of producing a good: Question 6 options: is the maximum value of other goods that could have been produced using the same resources. equals the out-of-pocket costs incurred in producing the good. is the value of inputs used up in production. is the value of other goods that could have been produced using the same resources.

Please correct answer and don't used hand raiting and don't used Ai solution

not use ai please

Answer 2

Question

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Answer 6

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.

Answer 7

Chapter 4, Problem 1RE

To determine

To evaluate:

The decision of choosing a basket on budget line when marginal utility arising from two goods is positive.

Answer 8

Expert Solution & Answer

Explanation of Solution

Budget line shows the budget constraint, which means the combinations of goods and services that can be possibly attained with the given current prices and limited income.

Positive marginal utility of a consumer means that the bundles of goods choosenprovides satisfactory utility. The utility arising from the consumption of an additional unit of a good is positive which meansone could increase utilityby consuming some basket outside the budget line but doing this or crossing the budgetline is unaffordable and not feasiblefor consumer. Thus, one chooses basket that lies along the budget line as the most preferred basket.