Question

Show on a figure the effect of a government warning that smoking is dangerous to health...

  1. Show on a figure the effect of a government warning that smoking is dangerous to health using indifference curves a budget line. Assume the individual has a choice between cigarettes and all other goods. Also, start with an assumption that the individual was maximizing utility before the information from the government. Provide the necessary explanation for your answer. Label cigarettes on the x-axis and all other goods on the y-axis.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Secondhand cigarette smoke is believed to have a negative effect on the health of those who...
Secondhand cigarette smoke is believed to have a negative effect on the health of those who inhale it. These people have chosen not to smoke, but nevertheless are negatively affected by the choice of others to smoke. a) Draw the market for cigarettes showing the demand, the marginal cost, and the marginal social cost of smoking cigarettes if this belief is correct. b) Label the market price and quantity of cigarettes c) Label the efficient quantity (the quantity that reflects...
Suppose that the government provides eligible people with food stamps for cheese. Abigail, an eligible individual...
Suppose that the government provides eligible people with food stamps for cheese. Abigail, an eligible individual has an income of $6 and plans to spend it on some combination of cheese and other goods The per unit price of cheese and other goods is $0.25. Sketch the budget line for Abigail, who plans to spend $6 on some combination of cheese and other goods. Add an indifference curve (label it IC1) assuming her optimal combination is 14 units of other...
Suzie, a former actress, spends all her income doing the two things she loves: attending plays...
Suzie, a former actress, spends all her income doing the two things she loves: attending plays and going to movies. Plays and movies are perfect substitutes for Suzie and she likes plays exactly twice as much as she likes movies. a. (Use one color) Carefully draw her indifference map (at least two indifference curves) with plays on the vertical axis and movies on the horizontal axis). Label them such that U2>U1. You can use increments of 2 on the axes....
Question 1 If you are trying to make yourself as happy as you can be given...
Question 1 If you are trying to make yourself as happy as you can be given the constraints that you face, you are effectively: Select one: a. trying to find the intersection point between two budget constraints. b. trying to find the point on the budget constraint that is on the highest indifference curve. c. trying to find the point where the budget constraint and an indifference curve intersect. d. trying to find the point on an indifference curve that...
Consider a student who purchases education (x) and other goods (y). The student has preferences over...
Consider a student who purchases education (x) and other goods (y). The student has preferences over these goods given by u(x, y) = ln(x) + 3ln(y). The prices of education and other goods are, respectively, px = 10 and py = 5, and the student’s income is I = 20. A. Graph the budget constraint, IEP, optimal bundle (x ∗ , y∗ ), and the indifference curve passing through the optimal consumption bundle. Label all curves, axes, slopes, and intercepts....
Question 1 The line that connects the combinations of goods that leave you indifferent is called:...
Question 1 The line that connects the combinations of goods that leave you indifferent is called: Select one: a. the indifference curve. b. the budget constraint. c. the indifference constraint. d. the indifference line. Question 2 An increase in income will cause: Select one: a. the budget constraint to become flatter, so that it includes more combinations. b. the budget constraint to become steeper, so that it includes more combinations. c. a parallel shift inward of the budget constraint. d....
I. Chapter 3: Question 3.17 on page 104 from Besanko and Braeutigam 5th ed. Answer all...
I. Chapter 3: Question 3.17 on page 104 from Besanko and Braeutigam 5th ed. Answer all parts of Problem 3.15 for the utility function U(x, y) = xy + x. The marginal utilities are MUx = y + 1 and MUy = x. a) Is the assumption that more is better satisfied for both goods? b) What is MRSx, y? Is MRSx, y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? How do...
George is making a consumption choice over apples (a) and bananas (b). George’s preferences are represented...
George is making a consumption choice over apples (a) and bananas (b). George’s preferences are represented by u (a, b) =(2a^2)b where a > 0 and b > 0. Denote by f = (a, b) a fruit bundle. 1. In terms of preference relations, how does George rank the three bundles f1 = (3, 1), f2 = (1, 3), and f3 = (2, 2) relative to each other? 2. State George’s marginal rate of substitution (MRS) function, MRS(a, b) (where...
1. Show a consumer’s budget constraint and indifference curves for soda drinks and slices of pizza....
1. Show a consumer’s budget constraint and indifference curves for soda drinks and slices of pizza. Show the optimal consumption choice. If the price of soda drinks is $1.50 per can and the price of a slice of pizza is $2 per slice, what is the marginal rate of substitution at the optimum? 2. Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is −0.25. Suppose also that Mia spends $10,000 a year...
1. Show a consumer’s budget constraint and indifference curves for soda drinks and slices of pizza....
1. Show a consumer’s budget constraint and indifference curves for soda drinks and slices of pizza. Show the optimal consumption choice. If the price of soda drinks is $1.50 per can and the price of a slice of pizza is $2 per slice, what is the marginal rate of substitution at the optimum? 2. Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is −0.25. Suppose also that Mia spends $10,000 a year...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT