Question

curve to the right. True or false? Explain. 4. The budget line shows all possible combinations of two goods that yield the same level of utility to the consumer. True or false? Explain. 5. In ordinal utility, consumer equilibrium occurs at the point where: MRSxy Py/Px. (Assume good Y is on the Y axis and good X is on the X axis.) True or false? Explain. 6. Ordinal Utility (Indifference Curves & Budget Constraint Lines) has been said to have an inherent advantage over Cardinal Utility (which includes units of satisfaction) when it comes to application. Is there an inherent advantage and, if so, what is it? Explain. 7. Is there a difference between value in use and value in exchange? How does the distinction between Total Utility and Marginal Utility help one answer this question? Might the Diamond-Water Paradox provide a helpful illustration? 8. Assume you are an economist charged with advising Santa Claus and Santa, concerned about consumer satisfaction, tells you that he wants you to find an efficient way for people to end up with gifts that better conform with their wishes. In advising Santa, what would you tell him? Explain. Unread Search entries or author Fl

Answer 1

As per HOMEWORKLIB RULES in case of multiple questions only the first question is to be answered

Kindly ask rest of the questions in a separate post

4. False

Reason: The budget line shows various different combinations of two goods which can be afforded by the consumer. Utility derived from each combination would be different.