(a) To evaluate: It is to be stated that the given assumption more is better is sufficient for both goods.

Question

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Answer 1

Question

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

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U(x, y) = xayb A consumer maximises utility subject to a budget constraint M = Pxx+Pyy Where px is the price of good x, py is the price of good y and M is the budget available. a. Derive an expression for the marginal utility of x. Under what condition is the marginal utility diminishing. b. Derive an expression for the marginal utility of y. Under what condition is the marginal utility diminishing.

Answer 2

Question

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

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Answer 3

Question

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

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Answer 4

Question

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

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Answer 5

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

Answer 6

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

Answer 7

Chapter 3, Problem 3.15P

To determine

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

Answer 8

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

Answer 9

To determine

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

Answer 10

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

Answer 11

To determine

(c)

To evaluate:

The term MRSx,y is to be stated.

Answer 12

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

Answer 13

To determine

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

Answer 14

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

Answer 15

To determine

(e)

To evaluate:

The typical indifference curve is to be drawn.

Answer 16

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

Answer 17

To determine

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 3 - Prob. 1RE Ch. 3 - Prob. 2RE Ch. 3 - Prob. 3RE Ch. 3 - Prob. 4RE Ch. 3 - Prob. 5RE Ch. 3 - Prob. 6RE Ch. 3 - Prob. 7RE Ch. 3 - Prob. 8RE Ch. 3 - Prob. 9RE Ch. 3 - Prob. 10RE

(a) To evaluate: It is to be stated that the given assumption more is better is sufficient for both goods.

Solution Summary: The author explains that the given assumption more is better is not sufficient for both goods. Marginal utility shows the additional utility the consumer is deriving from consuming additional units of that product or service.

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

(c)

To evaluate:

The term MRSx,y is to be stated.

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

(e)

To evaluate:

The typical indifference curve is to be drawn.

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.

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Chapter 3 Solutions

(a) To evaluate: It is to be stated that the given assumption more is better is sufficient for both goods.

Solution Summary: The author explains that the given assumption more is better is not sufficient for both goods. Marginal utility shows the additional utility the consumer is deriving from consuming additional units of that product or service.

(a) To evaluate: It is to be stated that the given assumption more is better is sufficient for both goods.

(b) To evaluate: The behavior of the marginal utility of x is to be ascertained.

(c) To evaluate: The term MRSx,y is to be stated.

(d) To evaluate: The behavior of MRSx,y along the indifference curve is to be stated.

(e) To evaluate: The typical indifference curve is to be drawn.

(f) To evaluate: The second indifference curve, U2 with U2 > U1 on the previously drawn graph is to be drawn.

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Chapter 3 Solutions

(a)

To evaluate:

It is to be stated that the given assumption more is better is sufficient for both goods.

(b)

To evaluate:

The behavior of the marginal utility of x is to be ascertained.

(c)

To evaluate:

The term MRSx,y is to be stated.

(d)

To evaluate:

The behavior of MRSx,y along the indifference curve is to be stated.

(e)

To evaluate:

The typical indifference curve is to be drawn.

(f)

To evaluate:

The second indifference curve, U₂ with U₂ > U₁ on the previously drawn graph is to be drawn.