f 1 Appendix - showing an indifference curve. Quantity of Y C B Quantity of X The slope of the budget line facing the consumer is a. -Px/Py O b. -X/Y O c. -Py/Px d. -Y/X e. none of the above
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- qty per week Marginal Utility of songs Marginal Utility of Cookies 1 15 25 13 20 3 12 16 4 11 13 10 11 6. 9 10 7 8. 7 8. 6. 7 10 Above is the utility of Sara for song and cookie consumption. If the price of a song is $2 and the price of a cookie is $1, how many cookies and songs will sara consumer? Why?Draw some indifference curve for piza and pepsi expalin of these indifference curve?Consider an economy with two goods, consumption c and leisure 1, and a representative consumer. The consumer is endowed with 24 hours of time in a day. A consumer's daily leisure hours are equal to 1 = 24-h where h is the number of hours a day the consumer chooses to work. The price of consumption p is equal to 1 and the consumer's hourly wage is w. The consumer faces an ad valorem tax on their earnings of 7 percent. The con- sumer also receives some exogenous income Y that does not depend on how many hours she works (e.g. an inheritance). The consumer's preferences over consumption and hours of work can be represented by the utility function U(c, h) = c-3h¹+, where 3 > 0 and p > 0 are parameters. 1+p
- At two points on an indifference curve,a. the consumer has the same income.b. the consumer has the same marginal rate ofsubstitution.c. the bundles of goods cost the consumer the sameamount.d. the bundles of goods yield the consumer thesame satisfaction.b. Explain the relationship between the budget constraint and indifference curve at consumer optimum.Draw a consumer’s indifference curves for pizza and coke. Describe and explainproperties of these indifference curves.
- 1 Giving a list of arguments, explain why indifference curves cannot intersect witheach other. 2 Calculate the price elasticity of supply when the price is S80 and when the price is$90In this question use 'well-behaved' indifference curves. (a) Draw an 'optimal solution'. (b) The price now falls. On the same graph draw the new optimal solution. (c) Has the consumption of good 1 gone up or down? What type of good could this be?a. Fill in the third column showing the marginal utility he gets from each additional scoop. Use a negative sign if appropriate. Quantity of Ice Marginal Utility of Total Utility Cream (scoops) Last Scoop Eaten 1 12 12 2 19 23 4 23 20
- 12 2 4 6 8 Water (bottles per day) The figure above shows three of a consumer's indifference curves. Which point is most preferred? Point Conly Point Gonly Point Jonly Points Cand G are tied for the most preferred. More information is needed to determine which point is most preferred. 2.. Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris paribus what would be the impact on the Budget line?Px Suppose that a consumer consumes at a point on the Budget line where MRS, Y In order to Py increase total utility, what adjustment should consumer make? Buy more X and less Y Nothing can be done since income is not sufficient. Buy more Y and less X Buy more X and Y.
