please type it thanks!Homework Answers
Indifferent means ‘not different’ or ‘same’.
An indifference curve is the curve at every point of which the utility would remain same.
The indifference curve of perfect complementary goods is ‘L’ shaped.
Because complementary goods are typically consumed in a more-or-less fixed proportion. For example, think of your preferences between right shoes and left shoes. If you're like most people, you would be very unlikely to want to buy more left shoes than right shoes, regardless of the relative prices of the two. The indifference curves reflect those fixed proportions. Other, less extreme examples include cars and petrol (gasoline), printers and toner, and so forth.
So for consumers either of two good will be not fruitfull,consumer will always take into account both the goods together, that's the reason the indifference curve is L shaped.
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;
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b) Calculate and intuitively interpret the elasticity of
substitution.
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Suppose there are two consumption goods and preferences of a
consumer can be represented by the following utility function:
;
a) Derive the Marshallian demand function of this consumer.
b) Calculate and intuitively interpret the elasticity of
substitution.
d/11027(0 - 1) + 10) = (2x Iz)n (0<a <1:0 +p<1)
4. In a two-good world, suppose a consumer views the goods as perfect substitutes. Draw a graph of the consumer's choice problem, with a budget constraint and a few indifference curves. (Assume the slope of the indifference curves is different from the slope of the budget constraint.) What is notable about the consumer's preferred bundle?
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