Identify the shape of the indifference curve.

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Answer 1

Question

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

(b)

To determine

Identify the shape of the indifference curve.

(c)

To determine

Identify the shape of the indifference curve.

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Lionel eats ham (x) and cheese (y). The utility function U(x,y)=0.25x + 2y^0.5 represents his preferences.a) What is Lionel’s MRS? Holding y constant, how does his MRS change as ham (x) is increased?b) What does your answer in (a) imply about his indifference curves as you hold y constant and increase x? In (c) and (d) you are asked about the Marshallian and Hicksian Demands for cheese (y). Do NOT calculate the demand functions to answer these questions. Use your answers to (a) and (b) to explain your answer. c) Holding prices constant, what is the effect of an increase in income on his Marshallian demand for cheese (y)? Briefly explain your answer.d) Holding prices constant, what is the effect of an increase in utility on his Hicksian demand for cheese (y)? Briefly explain your answer.

Mr. Abdulah enjoys Coffee (K) and Tea (T), with the utility function U (K, T) = 3K + 4T. Question: - Draw the Indifference curve for Abdul if the price of a cup of coffee and tea is Rp. 3, - and Mr. Abdulah has Rp. 12, - to spend on Coffee and Tea. - If the coffee price drops to Rp. 2, - what effect will it have? He wants his satisfaction equal to the original Utility curve. Show it in the picture!

Answer 2

Question

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

(b)

To determine

Identify the shape of the indifference curve.

(c)

To determine

Identify the shape of the indifference curve.

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Answer 3

Question

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

(b)

To determine

Identify the shape of the indifference curve.

(c)

To determine

Identify the shape of the indifference curve.

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Answer 4

Question

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

(b)

To determine

Identify the shape of the indifference curve.

(c)

To determine

Identify the shape of the indifference curve.

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Answer 5

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

(b)

To determine

Identify the shape of the indifference curve.

(c)

To determine

Identify the shape of the indifference curve.

Answer 6

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

Answer 7

Chapter 4.A, Problem 1E

(a)

To determine

Identify the shape of the indifference curve.

Answer 8

(b)

To determine

Identify the shape of the indifference curve.

Answer 9

(b)

To determine

Identify the shape of the indifference curve.

Answer 10

(c)

To determine

Identify the shape of the indifference curve.

Answer 11

(c)

To determine

Identify the shape of the indifference curve.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4.A - Prob. 1E Ch. 4.A - Prob. 2E Ch. 4.A - Prob. 3E Ch. 4.A - Prob. 4E Ch. 4.A - Prob. 5E Ch. 4 - Prob. 1RQ Ch. 4 - Prob. 2RQ Ch. 4 - Prob. 3RQ Ch. 4 - Prob. 4RQ Ch. 4 - Prob. 5RQ

Identify the shape of the indifference curve.

Solution Summary: The author illustrates the different amount of utility for the given utility function as shown in Figure 1. Marginal Rate of Substitution represents the rate at which an individual can give up something to obtain another commodity.

Concept explainers

Identify the shape of the indifference curve.

Identify the shape of the indifference curve.

Identify the shape of the indifference curve.

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