Give the answer with show all steps The following questions are independent of each other:Samir consumes apples and bananas and is in consumer equilibrium.The marginal utility from his last apple is 81 and the marginal utility from his last banana is 27.If the price of an apple is $0.90, then the price of a banana is $As one moves up a typical indifference curve, how does the marginal rate of substitution change?ItThe marginal rate of substitution of X for Y is 5, the price of X is $4, and the price of Y is $7.A utility-maximizing consumer should chooseX andY.The first can of Coke gives 26 units of utility to Witney, while the second can of Coke increases her total utility to 38.The marginal utility of the second can of Coke isunits.

Approach to solving the question: Explanation:Since the marginal utility of an apple is higher than…

Answered: The following questions are independent…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 1SQP

See similar textbooks

Similar questions

Suppose utility can be measured by "utils" and that Jim buys both coffee and bagels. The price of coffee is $2 and the price of a bagel is $3. If Jim is currently consuming coffee and bagels such that the marginal utility from the last cup of coffee consumed was 6 utils and the marginal utility from the last bagel consumed was 12 utils, is Jim maximizing utility? Why or why not? If not, what should Jim do? Explain in detail.
The budget set, or budget constraint, in the graph shows the possible combinations of brownies and ice cream cones that can be purchased. Assume that this person has a total of $18 to spend on brownies and ice cream cones. How much does a brownie cost? $ Assume that at point A, the marginal utility from a brownie is 10 and the marginal utility for an ice cream cone is 18. This person should consume more brownies and fewer ice cream cones. is utility maximizing. should consume more ice cream cones and fewer brownies.
Five consumers have the following marginal utility of apples and pears: The price of an apple is $1, and the price of a pear is $2.Which, if any,of these consumers are optimizing over their choice of fruit? For those who are not,how should they change their spending?
Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is measured on the vertical axis while food is measured on the horizontal one. Suppose the price of food is €3 per unit, the price of clothing is €2 per unit and that Jason's income is €36. Calculate the number of units of clothing that Jason consumes in equilibrium. ourCTIOu
Suppose that Dale consumes only coffee and cheese, both of which have diminishing marginal utility. For each of the following cases, determine whether Dale should 1Consume more coffee and less cheese, or2Consume less coffee and more cheese: 1.The marginal rate of substitution of cheese for coffee is 3 (i.e., the marginal utility of cheese is three times the marginal utility of coffee), while the price ratio is 2 (i.e., cheese costs twice as much as coffee). 2.The marginal rate of substitution of cheese for coffee is 1 (i.e., the marginal utility of cheese is equal to the marginal utility of coffee) while the price ratio is 2 (i.e., cheese costs twice as much as coffee). 3.The marginal rate of substitution is initially equal to the price ratio, but the price of coffee increases. 4.The marginal rate of substitution is initially equal to the price ratio, but the price of cheese decreases. 5.The marginal rate of substitution is initially equal to the price ratio, but Dale enters exam…
Jane's utility function is U = 4XY, where X= number of sandwiches per week and Y = number of salads per week. a. What are Jane's marginal utility of X and marginal utility of Y? b. What is Jane's marginal rate of substitution of sandwiches for salads (if salads are on the y- axis and sandwiches are on the x-axis)? c. Jane's income is $400, the price of a sandwich is $2, and the price of a salad is $4. How many sandwiches and how many salads does Jane consume to maximize her utility? d. When the price of a sandwich is $1, what is her new optimal bundle? e. Plot a graph and show your optimal bundles in parts (c) and (d) on the same graph.
Five consumers have the following marginal utility of apples and pears The price of an apple is $1, and the price of a pear is $2.Which, if any, of these consumers are optimizing over their choice of fruit? For those who are not, how should they change their spending?
The marginal utility for shoes and coffee is given below for five individuals. A pair of shoes costs $2, and a cup of coffee costs $1. Which of these consumers are optimizing over their choices? Explain For those who are not, how should they adjust their spending? Explain “Pasta is Miguel’s favorite meal therefore the law of diminishing marginal utility does not apply”. Do you agree with this statement? It is known that the indifference curve is convex. What does this tell you about the relationship between the goods? The income effect and the substitution effect work in the same direction for a normal good. Explain how this differs for an inferior good.
a. What is your marginal rate of substitution of $1 bills for $5 bills? b. Produce an indifference curve graph for your preferences over these two goods. Make sure you label your graph very carefully and precisely.
Suppose that Jon is purchasing the optimal amounts of apples and oranges. The marginal utility of the last apple is 8 and of the last orange is 6. If the price of an apple is $1, what must be the price of an orange?:" 50 cents. $1.40. 75 cents. $1.33.
The budget set, or budget constraint, in the graph shows the possible combinations of brownies and ice cream cones that can be purchased. Assume that this person has a total of $18 to spend on brownies and ice cream cones. How much does a brownie cost? $ Assume that at point A, the marginal utility from a brownie is 10 and the marginal utility for an ice cream cone is 18. This person is utility maximizing. should consume more brownies and fewer ice cream cones. should consume more ice cream cones and fewer brownies. Brownies 18- 16- 14- 12- 10- 8- 6- 4 2. 0 1 2 3 1 A 1 + 4 5 Budget constraint 6 7 8 9 10 11 12 13 14 Ice cream cones
If a consumer has chosen optimally, their Marginal Rate of Substitution is equal to the price ratio. Why is this? Interpret this in terms of the “price of utility” or “marginal utility per dollar” for each good.

SEE MORE QUESTIONS

Recommended textbooks for you

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS