Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 6.A, Problem 5SQ
To determine
The consumer equilibrium.
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When marginal utility is positive, total utility____
Q- Marginal utility can never be negative.
True/False
Consider an economy with two goods, consumption c and leisure 1, and a
representative consumer. The consumer is endowed with 24 hours of time
in a day. A consumer's daily leisure hours are equal to 1 = 24-h where
h is the number of hours a day the consumer chooses to work. The price
of consumption p is equal to 1 and the consumer's hourly wage is w. The
consumer faces an ad valorem tax on their earnings of 7 percent. The con-
sumer also receives some exogenous income Y that does not depend on how
many hours she works (e.g. an inheritance). The consumer's preferences over
consumption and hours of work can be represented by the utility function
U(c, h) = c-3h¹+, where 3 > 0 and p > 0 are parameters.
1+p
Chapter 6 Solutions
Economics For Today
Ch. 6.1 - Prob. 1YTECh. 6.1 - Prob. 2YTECh. 6.2 - Prob. 1YTECh. 6.A - Prob. 1SQPCh. 6.A - Prob. 2SQPCh. 6.A - Prob. 3SQPCh. 6.A - Prob. 1SQCh. 6.A - Prob. 2SQCh. 6.A - Prob. 3SQCh. 6.A - Prob. 4SQ
Ch. 6.A - Prob. 5SQCh. 6.A - Prob. 6SQCh. 6.A - Prob. 7SQCh. 6.A - Prob. 8SQCh. 6.A - Prob. 9SQCh. 6.A - Prob. 10SQCh. 6.A - Prob. 11SQCh. 6.A - Prob. 12SQCh. 6.A - Prob. 13SQCh. 6.A - Prob. 14SQCh. 6.A - Prob. 15SQCh. 6 - Prob. 1SQPCh. 6 - Prob. 2SQPCh. 6 - Prob. 3SQPCh. 6 - Prob. 4SQPCh. 6 - Prob. 5SQPCh. 6 - Prob. 6SQPCh. 6 - Prob. 7SQPCh. 6 - Prob. 8SQPCh. 6 - Prob. 9SQPCh. 6 - Prob. 10SQPCh. 6 - Prob. 1SQCh. 6 - Prob. 2SQCh. 6 - Prob. 3SQCh. 6 - Prob. 4SQCh. 6 - Prob. 5SQCh. 6 - Prob. 6SQCh. 6 - Prob. 7SQCh. 6 - Prob. 8SQCh. 6 - Prob. 9SQCh. 6 - Prob. 10SQCh. 6 - Prob. 11SQCh. 6 - Prob. 12SQCh. 6 - Prob. 13SQCh. 6 - Prob. 14SQCh. 6 - Prob. 15SQCh. 6 - Prob. 16SQCh. 6 - Prob. 17SQCh. 6 - Prob. 18SQCh. 6 - Prob. 19SQCh. 6 - Prob. 20SQCh. 6 - Prob. 21SQCh. 6 - Prob. 22SQCh. 6 - Prob. 23SQCh. 6 - Prob. 24SQCh. 6 - Prob. 25SQ
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- Explain the law of marginal utility. What is its importance in understanding the preference of consumer consumption.arrow_forwards) Using the indifference curves, a budget line and a price change, show how we can derive an individual's demand curve for a product..arrow_forwardA consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.arrow_forward
- The rate at which a consumer must give up y to get one more x is equal to * 2 points a)-MUx/MUy. b)-Px/Py. c)MUy/MUx. d)-Py/Px.arrow_forwardTrue/False Marginal utility keeps falling with the each additional consumption of a good or service.arrow_forwardIf BC2 is the relevant budget constraint, then which bundle (combination of X and Y goods) will maximize this consumer's untility? A. A. B. B. C. C. D. D. E. E. F. F. G. G. H. H. I. I. J. J.arrow_forward
- hand written plz asap please i'll upvotearrow_forwardA fall in the price of a good will rotate the budget constraint _________and make it possible for a consumer to reach higher indifference curves. As a result, the consumer will_________ the quantity of the good demanded. A. inward; increase B. outward; decrease C. inward; decrease D. outward; increase.arrow_forwardA budget constraint line represents the different combinations of two goods that will yield the consumer the same satisfaction. O prices that will yield the consumer the same satisfaction. prices the consumer faces when deciding what goods to consume. two goods the consumer is able to purchase.arrow_forward
- What would happen to your client budget constraint line for shoes (X) and sneakers (Y) if cost of sneakers rose.Would it move right, left, stay unchanged , change slope?arrow_forwardThe answer should be typed.arrow_forwardplease explain the theory of marginal utility. Please include a particular product or service you use and how marginal utility applies. Search entries or author Don't copy from privious answerarrow_forward
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