Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter E, Problem 4QP
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- Find utility functions given each of the following indifferencecurves [defined by U()=k ]: a. z=k1/x/y/ b. y=0.5x24(x2k)0.5x c. z=y44x(x2yk)2xy22xarrow_forwardExplain in detail whether the following statements are true or false. A demand curve can never be upward sloping. Two indifference curves can never intersect.arrow_forwardDraw indifference curves for the following utility functions. a) u(x, y) = x+ 2y b) u(x, y) = min{x, 3y}arrow_forward
- Explain how indifference curves can never cross.arrow_forwardDiscuss the following utility functions using indifference curves: use real-world examples (use diagrams). Perfect substitutes Perfect complementsarrow_forwardConsider that Pepsi (P) and Coke (C) are perfect substitutes. Draw the graph of an indifference map for P (horizontal) and C (vertical), and explain why the indifference curves have that shape.arrow_forward
- Consider 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_forwardUse the image 2.2 below to answer this question. The slope of the indifference curve is given by AY/AX, where Y is the good measured on the vertical axis and X is the good measured on the horizontal axis. The slope gives the marginal rate of substitution (MRS). The slope of an indifference curve (the MRS) also gives: Image 2.2 MUX a) MUY MUy b) MUX MUX c) Px MUX d) PY Py e) Px OA is correct OB is correct OC is correct OD is correct OE is correctarrow_forwardJohn has a utility function for goods x1 and x2 which is represented by u(x1,x2)=x10.2x20.8. Assume her income is 100 TL and the prices of x1 and x2 are 10 TL and 20 TL, respectively. a) Express the marginal rate of substitution (MRS) between goods x1 and x2. As the amount of x1 increases relative to the amount of x2 along the same indifference curve, does the MRS increase or decrease? Explain. b) Derive the demand functions for goods x1 and x2.arrow_forward
- Question 6 Sketch one indifference curve that has the following form: U(x, y) = 3min (x,y) + yarrow_forwardA convex indifference curve implies what type of behavior? diminishing marginal utility complementary goods perfect substitutes inferior goodsarrow_forwardDoes a Budget constraint has only one individual indifference curve? Does every isocost line has a individual isoquant curve?arrow_forward
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