Question

A consumer consumes only two commodities, X and Y. Imagine this consumer’s downward sloping demand curve...

A consumer consumes only two commodities, X and Y. Imagine this consumer’s downward sloping demand curve for commodity X, with price on vertical axis and quantity of X consumed on horizontal axis. Imagine two points on this demand curve, with point B falling to the right and lower than point A.

Question 9 options:

MRSxy is the same at A and B points
MRSxy is less at B than at A

B represents higher utility than A.

Both a) and b) are correct

Both b) and c) are correct
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
Suppose the demand curve for movie tickets is downward sloping and the income elasticity of demand...
Suppose the demand curve for movie tickets is downward sloping and the income elasticity of demand for economics textbooks is positive. a. Draw a utility-maximization model showing the substitution and income effects created when the price of movie tickets rises. (Set up your model with movie tickets on the horizontal axis and all other goods on the vertical axis.) b. Explain how you can tell from your model that the income elasticity of deman d for movie tickets is positive.
number 10 A perfectly competitive producer’s demand curve is: a. downward sloping but more elastic than...
number 10 A perfectly competitive producer’s demand curve is: a. downward sloping but more elastic than the market-demand curve. b. also the market-demand curve. c. upward sloping. d. a vertical line. e. a horizontal line.
Consider a consumer that has preferences defined over bundles of non-negative amounts of each of two...
Consider a consumer that has preferences defined over bundles of non-negative amounts of each of two commodities. The consumer’s consumption set is R2+. Suppose that the consumer’s preferences can be represented by a utility func- tion, U(x1,x2). We could imagine a three dimensional graph in which the “base” axes are the quantity of commodity one available to the consumer (q1) and the quantity of commodity two available to the consumer (q2) respec- tively. The third axis will be the “height”...
2. An individual consumes products X and Y and spends $25. The pries of the two...
2. An individual consumes products X and Y and spends $25. The pries of the two goods are $3 per unit of X and $2 per unit of Y. The consumer in this case has a utility function expressed as: U(X,Y)=0.5XY          MUX=0.5Y     MUY=0.5X Draw the indifference curve for this consumer at U=20.       (2 pts) Does this consumer’s preference exhibit diminishing MRS?            (1 pt) Express the budget equation mathematically.                        (2pts) Determine the values of X and Y that will maximize utility in the consumption of X...
The demand curve for a monopolist producing a normal good is downward-sloping because of A. the...
The demand curve for a monopolist producing a normal good is downward-sloping because of A. the substitution effect being larger than the income effect. B. the income effect being larger than the substitution effect. C. diminishing marginal returns. D. price discrimination. E. diminishing marginal utility.
The demand curve for peanuts is downward-sloping. At a price of $2 / pound, the quantity...
The demand curve for peanuts is downward-sloping. At a price of $2 / pound, the quantity demanded of peanuts is 100 pounds. If the price of peanuts rises to $4 / pound, consumer surplus will: a. Decrease by exactly $200. b. Decrease by less than $200. c.Decrease by exactly $100. d. Decrease by more than $200.
1. As we move downward along a demand curve for apples, consumer well-being decreases. the marginal...
1. As we move downward along a demand curve for apples, consumer well-being decreases. the marginal utility of apples decreases. the marginal utility of apples increases. Both A and B are true. Both A and C are true.
Suppose a consumer’s utility function is given by U(X,Y) = X*Y. Also, the consumer has $360...
Suppose a consumer’s utility function is given by U(X,Y) = X*Y. Also, the consumer has $360 to spend, and the price of X, PX = 9, and the price of Y, PY = 1. a) (4 points) How much X and Y should the consumer purchase in order to maximize her utility? b) (2 points) How much total utility does the consumer receive? c) (4 points) Now suppose PX decreases to 4. What is the new bundle of X and...
Suppose there are only two goods, good X and a composite good. A rational consumer with...
Suppose there are only two goods, good X and a composite good. A rational consumer with a weekly income of $100 consumed 5 units of good X when the price of good X is $10 per unit. Suppose now the price of good X has decreased to $5 per unit. Draw the price-consumption curve (PCC) of this consumer assuming good X is a price-elastic good. Add a brief explanation about the shape of your PCC (that is, why it is...
Suppose that a consumer has preferences over bundles of non-negative amounts of each two goods, x1...
Suppose that a consumer has preferences over bundles of non-negative amounts of each two goods, x1 and x2, that can be represented by a quasi-linear utility function of the form U(x1,x2)=x1 +√x2. The consumer is a price taker who faces a price per unit of good one that is equal to $p1 and a price per unit of good two that is equal to $p2. An- swer each of the following questions. To keep things relatively simple, focus only on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT