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
Homework Answers
Ans is B
MRS is the slope of indifference curve which decreases as more unit is consumed. IC is bowed towards origin and is concave to the origin. Slope of IC=MRS=MUx/MUy
MUx and MUy decreases because of law of diminishing marginal utility. Consumer always prefer variety of goods and prefers a balanced consumption
Add Answer to:
Marginal rate of substitution is _____
a. Increasing because consumer’s indifference curve is bowed
outward
b....
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3. An indifference curve is a. the set of all points of consumer equilibrium as the...
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. Given that the slope of an indifference curve at any point is the “marginal rate of substitution” between Y and X explain/prove that MRS is equal to the ratio of the consumer’s marginal evaluation of good X to his/her marginal evaluation of good Y (i.e. MRS = -MUx/MUy). (2 pts)
For the following utility functions, a. Find the marginal rate of substitution. b. Derive the equation...
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Given the indifference curve shown to the right: a. What is the marginal rate of substitution...
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a. What is the marginal rate of substitution are you move from point F to point G?
b. Would you expect the absolute value of the MRS to be higher lower or the same as you continue to substitute audio CDs for books?
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Question 16 1 pts A typical indifference curve is negatively sloped because: as we consume more...
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Given the indifference curve shown to the right:
a. What is the marginal rate of substitution are you move from point F to point G?
b. Would you expect the absolute value of the MRS to be higher lower or the same as you continue to substitute audio CDs for books?
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The budget line A. Represents the set of all baskets that give the consumer the same level of utility while holdi spending constant B. Represents the set of all baskets the consumer can afford C. Represents the set of all baskets in which the consumer purchases only one of the goods. D. Represents the set of all baskets the consumer can afford while spending all available inconm QUESTION 2 Marginal utility A. Is the ratio of total utility to total...
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