Draw the indifference curve for someone decidinghow to allocate time between work and leisure.Suppose the wage increases. Is it possible that theperson’s consumption would fall? Is this plausible?Discuss. (Hint: Think about income and substitutioneffects.)

Q: Refer to the indifference curve/budget line diagram below in Figure 4 for Jeremiah. He has $300 in…

A: Indifference curve shows different combinations of two goods that give same level of utility.

Q: An individual consumes two goods. Let prices and income in periods 0 and 1 be given p° = (pi, p2),…

A: Given  Indirect utility function  vp,y= yp1p2 In period 0 Price and income:  p0=p10, p20 income = y0…

Q: Assume that a person earns $10 per hour and her non-labor income increases from $100 to $200. She…

A: Given assumptions  that; A person earns $10 per hour and her non-labor income increases from $100 to…

Q: 12. [G] To find the Income/Substitution effects, graphically we find the point on the original…

A: The indifference curve shows the combination of two goods that is going to give the customer equal…

Q: 3) Diminishing marginal rate of substitution can be seen when indifference curves A) become flatter…

A: Typically, marginal substitution is lessening, meaning a shopper picks the substitute instead of…

Q: Explain why most indifference curve are convex??

A: In economics the indifference curve is usually denoted as the contour line merely where the value of…

Q: Q) U = xy and y = x(1+y) Are points (1,9) and (5,1) on the same indifference curve？   Explain it…

A: An Indifference curve represents different combinations of two goods ( say , good X and good Y )…

Q: MRS is constant along a linear indifference curve.

A: The 'marginal rate of substitution' along an indifference curve is given by  MRS=-MUxMUy

Q: Shahid has a monthly income of 8967 Bangladeshi Taka (BDT). He can buy two goods, brownies and…

A: Consumption Bundle Brownie quantity Brownie marginal quantity Brownie Total utility Fro-Yo Quantity…

Q: Explain the difference between indifference curve and iso-quant curve and similarly between budget…

A: Utility refers to the benefits that an individual derives from the consumption of goods and…

Q: (d) What point in the graph will lead to utility maximizing with the budget line LZ and the…

A: The budget line is a graphical representation of all potential combinations of the two commodities…

Q: Assume coffee and tea are substitutes. Assume income is $100, Pcoffee = $2 and Ptea = $4. Then the…

A: Relative price of an additional good x means relative price of foregoing some units of good y in…

Q: Explain why indifference curvesa. are downward sloping.b. are convex to the origin.c. do not cross.

A: The indifference curve shows all the different combinations of two goods that provide the same…

Q: At any point on an indifference curve, the slope of the curve measuresthe consumer'sa. income.b.…

A: The indifference curve shows the combination of two goods and services which gives the same constant…

Q: Suppose that a consumer has the indifference map shown above. The relevant budget line is  LZ. The…

A: The budget line depicts the combination of two goods, that a consumer can buy with a given level of…

Q: Use a general utility function and general prices and income to derive the equal marginal principle.…

A: Utility is the want satisfying power of a commodity. A utility function measures the preferences of…

Q: What can be the implications of a positively sloping indifference curve?

A: Indifference curves are those curves that represent combinations of two goods that give the same…

Q: a. Write the equation for the MRSMC (i.e., the MRS of C for M; M is increasing, C is decreasing).…

A: In economics, the marginal rate of substitution (MRS) is the quantity of one good that a customer is…

Q: What is an indifference curve? Also elaborate its different possibilities under the different…

A: The indifference curve is the curve which shows the different combination and bundle of two goods…

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: Briefly explain why the indifference curve is downward sloping

A: According to the consumer's theory, an individual maximizes his utility by consuming at a point…

Q: Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the…

A: In the case of perfect substitutes, the consumer would spend all of her budget on that good which…

Q: (a) Explain why point A is preferred over point B in the diagram below: Clothing Budget line…

A: With respect to two commodities, an indifference curve is a graph that depicts the combinations of…

Q: Use the image 2.2 below to answer this question. The slope of the indifference curve is given by…

A: Marginal utility describes the benefits or utility obtained from consumption of a commodity. It is…

Q: The budget constraint line cuts the horizontal axis at 12 units of X and it cuts the vertical axis…

A: X-intercept = Income / Price of X Y-intercept = Income / price of Y We can use any of the above two…

Q: Decompose the overall effect on the change in the optimal bundle into income effect and substitution…

A: Meaning of Income Effect: The term income effect refers to the situation under which the consumer…

Q: e marginal rate of substitution measures the distance between one indifference curve and tne •True

A: Marginal Rate of Substitution : The Marginal Rate of Substitution can be defined as the amount of…

Q: In case of the complementary goods what is the shape of the indifference curve ??

A: According to the given question Actually complementary goods are those goods which are initially an…

Q: With the help of indifference curve diagram (gift goods on one axis and all other goods on the…

A: Indifference curve is based on the ordinal utility analysis of Hicks and Allen. It represents the…

Q: Saima works as a free-lance worker at a software house in Rawalpindi. Suppose she keeps awake for…

A: i)

Q: If Brian Mulroney's money income increases and the prices of products J and K both increase, then…

A: The line that depicts a combination of both the goods that could be bought by a consumer through the…

Q: If a parallel shift rightwards of the budget constraint makes the household work more, then which of…

A: A parallel outward shift in the budget line implies an increase in the income of the consumer.

Q: Saima works as a free-lance worker at a software house in Rawalpindi. Suppose she keeps awake for…

A: The optimum level of consumption and leisure hours occurs at the point where the slope of budget…

Q: Economists use "indifference curves" to indicate individuals' preferences. These curves are parallel…

A: The indifference curve represents the consumer's preference and is downward slopping and do not…

Q: Q.7 A consumer's utility function is given by the expression: i = (0.6À"s + 0.4y"s). • Determine the…

A: Note- Since, you've asked question with multiple subparts, we'll only solve the first three subpart…

Q: How do we decide the amount we buy on the indifference curve? MU1/P1 = MU2/P2 %3D MU1/P1 = P2 MU1/P2…

A: Indifference curve shows the combinations of goods that give consumer the same level of…

Q: Which of the following is NOT true about indifference curves? O They are downward sloping O They do…

A: An Indifference curve is a locus of the combination of all the points that represent a different…

Q: Economist George Stigler once wrote that, according to consumer theory, “ifconsumers do not buy less…

A: Before answering the above question, let us first understand the concepts involved:  Substitution…

Q: Consider an indifference curve for someone deciding how to allocate time between work (and thus…

A: As the wages increase, the person would be willing to work more to earn more wages. So, he will give…

Q: Q-: Define indifference curve and elaborate different varieties/types of indifference curve

A: An indifference curve shows a combination of two goods or services that provide the consumer with…

Q: Antonin notices he is currently spending all of his money on a bundle (x1, x2) where his marginal…

A: The equilibrium in the consumption is obtained when the utility from the last dollar spent on each…

Q: Back to Assignment Attempts: Average: /2 10. Problems and Applications Q10 Consider an indifference…

A: The substitution effect induces a person to work and consume 'more ' in response to higher wages…

Q: Qu Robert's utility function is U(1, y) = 2/T + y. n every graph for this question, set y in the…

A: U(x,y) = 2x + y

Q: Gabriel has a weckly income (N) of $50, which he uses to purchase cupcakes (C) and tea (7). The…

A: Budget line curve Px*X + Py*Y = m where Px represents price of good X Py represents price of good Y…