EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 16.A, Problem 2SP
To determine
Draw the indifference curves for forks and knifes.
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would you rather maximize your total utility or your marginal utility?
Brenda wants to buy new car and has a budget of $25,000. She has just found a
magazine that assigns each car an index for styling and an index for gas mileage.
Each index runs from 1 to 10, with 10 representing either the most styling or best
gas mileage. While looking at the list of cars, Brenda observes that on average, as
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Illustrate the various combinations of style (S) and gas mileage (G) that Brenda
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Using the line drawing tool, illustrate Brenda's budget line. Label this line 'Budget
Line'.
Carefully follow the instructions above, and only draw the required object.
Suppose Brenda's preferences are such that she always receives two times as
much satisfaction from an extra unit of styling as she does from gas mileage. What
type of car will Brenda choose?ā¦
A consumer has a choice of spending $20,000 on a Honda or $14,000 on a Kia. She was observed buying a Kia during the weekend. Does this mean the consumer prefers the Kia to the Honda? Explain your answer
Chapter 16 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Suppose the marginal utility of a Coke is 15 utils, and its price is $1.50. The marginal utility of a pizza is 20 utils, and its price is $5. To achieve consumer equilibrium, you need to spendarrow_forwardBrenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 0 to 12, with 12 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $2,000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $4,000. (a) Illustrate (for yourself) the various combinations of gas mileage (G) and style (S) that Brenda could select with her $24,000 budget. Place gas mileage on the horizontal axis. ā¢ Her budget line is given by 4,000*G + [ Select ] *S= [ Select ] ā¢ The X-intercept of her budget line is equal to [ Select ] ā¢ The Y-intercept of her budget line is equal to [ Select ]arrow_forwardTotal utilityarrow_forward
- Explain the four kinds of utility.arrow_forwardThink about a favorite thing you often buy or enjoy. It could be your favorite food, a favorite place to visit, a type of event, or something you make us part of a hobbyļæ¼. As part of this review you will create a chart ( just like the examples of total in marginal utility) showcasing the favorite item. Include the following information: How many you purchase or consume in the course of a day, week, or a month. Marginal utility of additional consumptions The total utility of all consumptions. Letās assume that the largest utility you get from any one item is 20. Make it as interesting as you can by considering something that is important to you. Fill in the chart. ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼ļæ¼arrow_forwardConsumer value can be determined by how consumer utility compares between different items. Commentarrow_forward
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