**Question:**The budget constraint line by itself tells us preferences and indifference.- ○ True- ● False**Explanation:**A budget constraint line represents the combinations of goods and services that a consumer can purchase given their income and the prices of those goods. However, it does not convey information regarding the consumer's preferences or levels of satisfaction (indifference). Preferences are typically represented by indifference curves, which illustrate different bundles of goods between which a consumer is indifferent. Thus, the answer is "False" as the budget constraint line alone does not provide insight into preferences or indifference.

Answered: The budget constraint line by itself…

Business

Economics

The budget constraint line by itself tells us preferences and indifference. True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Mrs. Rochester earns $4500 a week and spends her entire income on computers and pastries, since…

A: a ) Mrs. Rochester insist that for every computers she buys, she must also buys a pastry's. This…

Q: If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope of the…

A: Budget constraint shows the relationship between the two goods, their prices and the income of the…

Q: Jason has the following utility function: U = F?C where F is food and C is clothing. Clothing is…

A: Given Jason utility function U=F2C .........(1) Where F is food and C is clothing…

Q: Consider a consumer with well-behaved and strictly convex preferences in an economy with just two…

A: Income effect refers to the change in the consumption of the good due to change in the purchasing…

Q: ice, but the second unit of Good X is only $2. lculate the slope of the budget constraint tween 1…

A: A budget constraint refers to all possible combinations of goods that someone can afford, given the…

Q: a. "Rajoo only eats vegetables. He does not derive any utility by consuming meat. In other words,…

A: Indifference curves are graphical representations of the utility levels of consumers. Higher…

Q: 1. We learned that the slope of the indifference curve is called the marginal rate of substitution…

A: An indifference curve is a graphical representation in microeconomics that suggests combos of goods…

Q: The diagram below shows one of Popeye's indifference curves (relating bottles of pure olive oil to…

A: Utility is the satisfaction derived from the consumption of goods. Marginal utility is the utility…

Q: The graph shows Esther's best affordable point at A. The price of seeing a movie rises and Esther's…

A: SE and IE are two components of the effect of the price change. SE reflects the change in quantity…

Q: Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and…

A: Dear student, find a detailed answer and step by step solution in the explanation part…

Q: Joon has preferences over two goods only-beer and pizza, both of which he loves. His initial budget…

A: As per the revealed preference theory If 2 bundles A & B are affordable for the consumer but he…

Q: Suppose that a consumer's budget decreased. Which of the following will happen to the budget…

A: Budget Constraint:Budget constraint refers to the limitation imposed on consumer choices by the…

Q: Ann consumes two goods, r and y. Her utility function is given by: u(x, y) = (x+1)VJ. The price of a…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: a. Suppose Fiona’s income is $100 per week, which she allocates between chocolates and books.…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer one question at a…

Q: How a demand curve can be derived with budget constraint- indifference curve framework? Explain

A: A demand bend portrays how much amount of a product will be purchased or demanded at different…

Q: 11. Suppose an individual has a daily income of Rs. 1,500 and spends it to consume commodities X and…

A: Income of the individual = 1500 Price of X = 75 Price of Y = 50

Q: Explain the consumer's equilibrium within the budget constraint - indifference curve framework

A: Consumer equilibrium is the point of rest, that is, the bundle from which the consumer have…

Q: Why is the consumer’s MRS equal to the price ratio at the optimal consumption point? Give a…

A: Answer: A consumer maximizes his/her utility where the indifference curve is tangent to the budget…

Q: Suppose Monty has 860 to spend on treats () and toys (9). The price of toys is p, -$2 and the price…

A: Given that Monty's utility function is ux,y=2xy ................(1) Marginal utility from good…

Q: In the following budget constraint- indifference curve graph, Nikki has $120 to spend on blouses and…

A: Budget constraint shows the relationship between the two goods, their prices and the income of the…

Q: Jacob receives an allowance of $12 per week. He spends all his allowance on ice cream cones and cans…

A: Budget Constraint refers to the equation that shows the relationship between the price of the goods…

Q: draw the budget constraint for a person with income of $ 1000 if the price of pepsi is $5 and the…

A: A budget constraint is a term used in economics to describe all of the different combinations of…

Q: In the above figure, if the budget line shifts from RT to RS, the substitution effect is illustrated…

A: The budget line represents the different combinations of two goods that can be purchased with…

Q: Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and…

A: (i) The original budget constraint equation is X * Price of Movie Ticket + Y * Price of Zoo Trip =…

Q: What does the law of equi marginal utility states? MU. MU, MU, Px P₂ P₂ MU₂ x P = MU₂ x P₂ =MU₂ x P₂…

A: The principle of equi-marginal utility in economics suggests that a rational consumer distributes…

Q: Ria earns an income of $2,000 per month Assume that she can either buy 5 laptops or 10 mobile phones…

A: A utility function is a mathematical formula that outlines a person's preferences for various…

Q: a halving price of the prices of good A and Good B have the same effects on the budget line as…

A: Budget line shows different combinations of two goods that can be bought with a given level of…

Q: Vani eats only green eggs and ham. He has an income of $36. Green eggs have a price of Price of…

A: Meaning of Utility Function: The term utility function refers to the total utility for a consumer…

Q: a. Andre has a salary of $1000. He spends his entire budget on shoes and beers. The cost for a pair…

A: The budget constraint shows all the different combinations of two goods that an individual is able…

Q: Consider the following graph which represents a consumer's budget constraint and indifference curves…

A: The budget line shows the different combinations of two goods that a consumer can consume given the…

Q: Amy has $16 a week to spend on coffee and cake. The price of coffee is $2 a cup, and the price of…

A: Budget the combination of goods that consumer can buy with given level of income and prices.

Q: suppose a consumer's marginal rate of substitute is three slice of pizza for one coke . if the price…

A: Given, MRS pizza for coke = MU of Pizza/ MU of coke = 3/1= 3 The optimal condition where the…

Q: Jaime has preferences over GOOD (A) and GOOD (B), with $60 to spend on the two goods. The market…

A: Answer -

Q: Оиestion 4: In Figure below a budget constraint is shown. If PY (the price of good Y) is $6, what is…

A: Budget constraint is a representation of the bundles of goods and services that a consumer can buy…

Q: Suppose that a there are two goods, X and Y. The price of Good X is $5 and the price of Good Y is…

A: A budget constraint can be understood as all the possible combinations of goods which can be…

Q: K Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from…

A: Thus, correct option is B. As discussed above PBMUB<PDMUD.. Hence he can increase or…

Q: Julian buys plants and flowers every month. Both are normal goods. When the price of flowers fell,…

A: As price changes ,the real income of consumer also changes.Income effect tells change in optimal…

Q: If Porsha view 3 glasses of juice as a perfect substitute for one cup of soda and vice versa, what…

A: The marginal rate of substitution is defined as how many numbers of good x have to be substituted to…

Q: In comparing one market basket, A, to others to the northwest or southeast, we can say that a…

A: The utility function refers to all those commodity bundles that derive the same amount of utility…

Question

Expert Solution

Step 1

Budget constraint: - it is a graphical representation of different bundles of goods that a consumer can purchase with a given income.

Indifference curve: - it shows a different combination of goods that provides the same level of satisfaction to the consumer.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Please answer the all question from the picture with the steps... God bless You... ☺️
Mrs. Rochester earns $4500 a week and spends her entire income on computers andpastries, since these are the only two items that provide her utility. Furthermore, Mrs.Rochester insists that for every computer she buys, she must also buy a pastry.e) Assume for this question only that when the price of computers decreases, less ofthat good is demanded. Illustrate the income and substitution effect of this pricedecrease.
Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and on tickets to the movies. Her original budget constraintis shown below. Let X represent movie tickets and Y represent trips to the zoo.i. What is the equation of the original budget constraint? ii. What is the price of a movie ticket? a trip to the zoo? iii. Assume a price change occurs and Jody now face the new budgetconstraint. What is the equation of the new budget constraint? iv. With the new budget constraint, what is the price of an amusement parkticket? a baseball ticket
In the following budget constraint- indifference curve graph, Nikki has $170 to spend on tops and pants. a. What is the price of a top? $ What is the price of a pair of pants? $ b. Is Nikki making the optimum choice if she buys 4 tops and 2 pants? OA. Yes, this point is on the budget constraint. OB. No, the indifference curve going through this point is not tangent to Nikki's budget constraint. OC. No, the other point of intersection of the indifference curve and the budget constraint is the optimal choice. OD. Yes, the indifference curve going through this point is tangent to Nikki's budget constraint. L Tops 10- 6 9- 8- G 7- 6- 3- 2- 1- 13 5 Pants 7 8 9 10 11 12
Jody has $360 to spend on her summer vacation. She decided to use the moneyon trips to the zoo and on tickets to the movies. Her original budget constraintis shown below. Let X represent movie tickets and Y represent trips to the zoo.i. What is the equation of the original budget constraint? ii. What is the price of a movie ticket? a trip to the zoo? iii. Assume a price change occurs and Jody now face the new budgetconstraint. What is the equation of the new budget constraint? iv. With the new budget constraint, what is the price of an amusement parkticket? a baseball ticket?
Consider the following graph. Assume that income increases, and the budget constraint line shifts to the right. The utility-maximizing choice on the original budget constraint is A. Enable ZoomPan
Andre has a salary of $1000. He spends his entire budget on shoes and beers. The cost for a pair of shoes is $15 and the cost for can of beer is $25. a.Construct Andre’s budget constraint (place) beers on the y-axis. b.Suppose Andre’s salary rises by 25%. Also suppose that the price of shoes and beers each rise by 40%. Construct Andre’s new budget constraint. What is the difference between the new and old budget constraints? c.Suppose that the price of beers fell from $25 per beer to $15. Construct Andre’s new budget constraint. What is the difference between the new and old budget constraints.
The nearby graph shows Beau's indifference curves and budget line for pizza and tacos. Beau will not spend his entire budget at point: Pizza O A B OD Indifference curves B D A E Budget constraint- C - U₂ U₁ U3 Tacos
Solve it correctly please.I will rate accordingly
The marginal rate of substitution is the slope of an indifference curve. O True O False
A consumer has income of 15000. Masks costs $35 per mask, and sanitizers cost $70 per bottle. The price of mask rises from $35 to $40 per mask, while the price of saniizer is unchangeD. For a consumer wih consant income of 15000, show what happens to consumption of both goods (assume both goods are normal goods) decompose the change into income and substitution effects
Esteban receives some utility from consuming a frozen dinner ( inferior good ( a normal good ) Suppose the price of a frozen dinner increases and the a frozen dinner is not a good DMacmillan Learning Which effect Which effect causes Esteban's quantity demanded of a frozen dinner to decrease income effect substitution effect marginal effect framing effect?