Question

Explain why consumers are indifferent between the demands of a good and show a graphical representation.

Explain why consumers are indifferent between the demands of a good and show a graphical representation.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Along an indifference curve of a consumer, he will be indifferent between buying x quantity of good 1 and y quantity of good 2 or x' quantity of good 1 and y' quanatity of good 2 as long as both (x,y) and (x',y') lie on the same indifference curve. This is because he will attain the same utility from all the bundles along an indifference curve and hence will be indifferent between demanding the quantities.

However, any bundle, say (x",y") on a higher indifference curve will be more preffered and he will not be indifferent anymore.

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
Choose the best match between the terms and definitions. Question 3 options: 12345 A graphical representation...
Choose the best match between the terms and definitions. Question 3 options: 12345 A graphical representation of 3 variables in 2-dimensional space where the two axes represent two variables and the third is represented by the size of the dot. 12345 A tabular summary of data for two variables. Also called a "PivotTable." 12345 A graphical representation of the relationship between two quantitative variables with one variable show on the x-axis and the other on the y-axis. 12345 A system...
A firm faces the following market demands for two groups of consumers: Q1 = 100 -P...
A firm faces the following market demands for two groups of consumers: Q1 = 100 -P Q2 = 50 -(1/2)P MC = AC =20 (assume it is costless to treat these groups separately) Use a 3 panel approach (1 panel for the single price, and 2 for the price discrimination) to answer the following questions A. Solve (and show) a single price equilibrium (find the total demand, and MR, and solve for P, Q, profit) B. Solve (and show) a...
In a market economy, will units of a good be produced and purchased if consumers value...
In a market economy, will units of a good be produced and purchased if consumers value them more than their cost of production? Explain why or why not. If the production cost per unit of a good exceeds the value derived by consumers, will the good continue to be produced and consumed? Why or why not?
Draw the graphs to show whether a map of concave to the origin indifferent curves that...
Draw the graphs to show whether a map of concave to the origin indifferent curves that parallel to each other satisfies the three assumptions (transitivity, completeness and more is better). Explain why or why not.
2. Explain the difference between a private good and a public good. Why has there been...
2. Explain the difference between a private good and a public good. Why has there been an increase in the number of public goods "produced" by governments?
Show graphically and explain why the private provision of a public good will not result in...
Show graphically and explain why the private provision of a public good will not result in an allocatively efficient outcome. As part of your answer you must provide a full explanation of what allocative efficiency is and from where it derives.
Why does consumer surplus decrease when price increases? Consumers buy less of the good at a...
Why does consumer surplus decrease when price increases? Consumers buy less of the good at a lower price. Consumers buy less of the good at a higher price. Consumers buy more of the good at a higher price. Producers cannot sell as much to the consumer.
1) It is important to assume that leisure is a normal good? Explain why or why...
1) It is important to assume that leisure is a normal good? Explain why or why not. 2) Suppose that consumers pay tax on their wage income. First redraw the consumer's budget constraint considering this percent-tax. Then, show how this effects the labor supply curve. 3). What happens to the equilibrium level of labor after a decline in the level of technology? 4). Suppose the cost of renting capital increases(shown by an increase in r). a) what happens to the...
find a good alarm explain why it is good? finad a bad alarm and explain why...
find a good alarm explain why it is good? finad a bad alarm and explain why it is bad? how you fix it?
Discuss the differences between internal and external users of information and their needs and demands on...
Discuss the differences between internal and external users of information and their needs and demands on an information system. Historically, which type of user has the firm catered to most? Requirement: DO NOT need to answer the question, only need explain why external users are catered to more than internal users.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT