Which of the following statement is correct? a. Consumer’s optimal choice is where marginal benefits equals...
Which of the following statement is correct?
a. Consumer’s optimal choice is where marginal benefits equals to marginal costs
b. Consumer’s optimal choice is where marginal benefits are greater than marginal costs
c. Slope of budget line indicates marginal benefits of consumption
d. Slope of indifference curve indicates marginal costs of consumption
Homework Answers
A is right answer
A. Consumer’s optimal choice is where marginal benefits are equals to the marginal costs
The consumer's optimal choice is defined as the consumer chooses consumption of the two goods so that the marginal rate of substitution equals the ratio of the relative prices
Add Answer to:
Which of the following statement is correct?
a. Consumer’s optimal choice is where marginal benefits equals...
optimal consumption & budget constraint
Q1. A consumer chooses an optimal consumption point where the A) marginal rate of substitution equals the relative price ratio. B) slope of the indifference curve exceeds the slope of the budget constraint C) ratios of all the marginal utilities are equal D) All of the above are correct. Q2. A budget constraint illustrates the A) prices that a consumer chooses to pay for products he consumes. B) consumption bundles that give a consumer equal satisfaction. C) purchases made by consumers. D) consumption bundles that a consumer can afford
4) A consumer’s utility function is u(x, y) = min{x, 3y} (a) Find the consumer’s optimal...
4) A consumer’s utility function is u(x, y) = min{x, 3y} (a) Find the consumer’s optimal choice for x, y as functions of income I and prices px,py. (b) Sketch the demand curve for y as a function of other price px when py = 10, I = 100. Suggestion: a picture showing the budget set, optimal choice and indifference curve. (I need help with the sketching which is the second part)
Understanding consumer’s decision making is important for corporate strategy. Which of the following is NOT directly...
Understanding consumer’s decision making is important for corporate strategy. Which of the following is NOT directly related to the benefits of understanding consumer’s optimal choice? a. Understanding consumer’s decision making is required to drive the supply curve b. Understanding consumer’s decision making is useful for corporate pricing strategy c. Understanding consumer’s decision making is useful for corporate strategic positioning strategy d. Understanding the marginal principle is useful to allocate efficiently scared resources
Marginal rate of substitution is _____ a. Increasing because consumer’s indifference curve is bowed outward b....
Marginal rate of substitution is _____ a. Increasing because consumer’s indifference curve is bowed outward b. Diminishing because consumers prefers variety and prefer a balanced consumption c. Increasing because consumers can easily find complementary goods d. Decreasing because consumer’s utility curve is linear
2.3 Choice III Consider a consumer whose preference is represented by the utility function where A...
2.3 Choice III Consider a consumer whose preference is represented by the utility function where A 0 and B 0. a) What is the consumer's marginal rate of substitution? b) If the consumer has income m and faces prices p-A and p - B, what are her optimal bundles? (There may be one, or more than one.) Draw a graph that illustrates this situation, including the budget line and the relevant indifference curve(s). c) If the consumer has income m...
Bob has $36 to spend on tacos and burritos which are both ordinary goods for Bob....
Bob has $36 to spend on tacos and burritos which are both ordinary goods for Bob. Burritos cost $4 each and tacos cost $2 each. a. Draw Bob's budget line with tacos on the x-axis and burritos on the y-axis. b. Draw an indifference curve showing Bob's optimal consumption at 5 burritos and 8 tacos. c. What is the ratio of the Marginal Utility of Burritos to the Marginal Utility of Tacos at Bob's optimal consumption bundle? d. On the...
1- The break-even point is the point where: A. incremental revenue equals incremental costs. B. marginal...
1- The break-even point is the point where: A. incremental revenue equals incremental costs. B. marginal revenue equals marginal cost. C. the slope of the demand curve equals the slope of the cost curve. D. total revenue equals total cost. 2- When the threat of new entrants is low, prices tend to be: A. higher. B. stable. C. lower. D. variable. 3- Costs that do not change with the volume produced are referred to as: A. unavoidable costs. B. totally...
If pA = $10, PB = $5,Y = $75, where p is the price of a...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
21. A positive income elasticity of demand coefficient indicates that a. a product is an...
21. A positive income elasticity of demand coefficient indicates that a. a product is an inferior good b. two products are substitute goods c. two products are complementary goods d. a product is a normal good 22. All the combinations of two products that will yield the same total utility to a consumer are reflected in a. the budget line b. the marginal rate of substitution c. an indifference curve d. the...
Question1 Question 4 Marginal utility is Marginal analysis compares to determine the optimal outcome or choice....
Question1 Question 4 Marginal utility is Marginal analysis compares to determine the optimal outcome or choice. Select the correct answer below Select the correct answer below: O total benefits, total costs O total benefits, marginal costs O marginal benefits, total costs O marginal benefits, marginal costs Question 2 O the additional satisfaction produced as the fim adds one additional unit of an inpurt O the additional satisfaction that a consumer derives from consuming one additional unit of a good O...
2.3 Choice III Consider a consumer whose preference is represented by the utility function where A 0 and B 0. a) What is the consumer's marginal rate of substitution? b) If the consumer has income m and faces prices p-A and p - B, what are her optimal bundles? (There may be one, or more than one.) Draw a graph that illustrates this situation, including the budget line and the relevant indifference curve(s). c) If the consumer has income m...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
Question1 Question 4 Marginal utility is Marginal analysis compares to determine the optimal outcome or choice. Select the correct answer below Select the correct answer below: O total benefits, total costs O total benefits, marginal costs O marginal benefits, total costs O marginal benefits, marginal costs Question 2 O the additional satisfaction produced as the fim adds one additional unit of an inpurt O the additional satisfaction that a consumer derives from consuming one additional unit of a good O...
Most questions answered within 3 hours.
-
Enter your answer in the provided box. The solubility of CO2 in
water at 25°C and...
asked 1 minute from now -
A second baseman tosses the ball to the first baseman, who
catches it at the same...
asked 14 minutes ago -
An object rests flat on a tablecloth, which is on top of a
table. Suppose you...
asked 14 minutes ago -
Which of the following will most likely occur as the result of
an unanticipated increase in...
asked 10 minutes ago -
Adria Lopez, owner of Success Systems, decides to prepare a
statement of cash flows for her...
asked 33 minutes ago -
The reach and involvement of the federal government, in terms of
its role in disaster relief,...
asked 36 minutes ago -
Problem: The equilibrium constant, Keq, is 5 x 10^-11 m HCO3
<-----------> H^+ + CO3^-2 Calculate...
asked 43 minutes ago -
Explain how blackbody radiation led to the idea of "quanta."
Will rate answer!
asked 49 minutes ago -
Two noble gases (Ne and He) are injected into the chambers of an
insulated container. Each...
asked 43 minutes ago -
Suppose you purchase a zero coupon bond with a face value of
$1,000, maturing in 18...
asked 48 minutes ago -
Do you believe that the $785,000 amount at the center of the
Overstock-Grant Thornton dispute was...
asked 49 minutes ago -
Find and , the mean and standard deviation of the
sampling distribution of :
μ = 25,...
asked 1 hour ago