Answered: Draw indifference curves that reflects…

Draw indifference curves that reflects the following preferences. A. Pizza and Pepsi B. Potatoes and Rice C. Income and Polluted Water. D. Consumer like Strawberries and dislike carrots

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Marginal Rate of Technical Substitution

MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.

Preferences and Utility Analysis

Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.

Question

Draw indifference curves that reflects the following preferences. A. Pizza and Pepsi B. Potatoes and Rice C. Income and Polluted Water. D. Consumer like Strawberries and dislike carrots

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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Step 1: Define indifference curve

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Step 2: A. Indifference curve for Pizza and Pepsi

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Step 3: B. Potatoes and Rice

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Step 4: C. Indifference curve for income and pollution

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