B. The indifference curves shown below are for Ali whose income per month is $1400. Using the information given in the graph below, answer the following questions: Good Y i. 1234 10 0 111. 10 14 Good X What are the conditions for consumer equilibrium in indifference curve analysis? 7 ii. What are the prices of goods Y and X when Ali is on lo, How much does Ali spend on good Y and good X respectively? What are the prices of goods Y and X when Ali is on ₁ Explain the changes that have happened that have caused Ali's indifference curve to move from Io to I₁. What are the quantities of X and Y do Ali purchase to maximise his utility? iv. Using the indifference curve analysis, derive the demand curve for good X. Total Product 0 C. What is free-rider problem and how does it cause underproduction of public goods in a competitive market? D. Complete the following short-run cost table using the information provided. 20 TFC AFC 12 TVC AVC 12 10 12 14 TC MC ATC

B. The indifference curves shown below are for Ali whose income per month is $1400. Using the information given in the graph below, answer the following questions: Good Y i. 1234 10 0 111. 10 14 Good X What are the conditions for consumer equilibrium in indifference curve analysis? 7 ii. What are the prices of goods Y and X when Ali is on lo, How much does Ali spend on good Y and good X respectively? What are the prices of goods Y and X when Ali is on ₁ Explain the changes that have happened that have caused Ali's indifference curve to move from Io to I₁. What are the quantities of X and Y do Ali purchase to maximise his utility? iv. Using the indifference curve analysis, derive the demand curve for good X. Total Product 0 C. What is free-rider problem and how does it cause underproduction of public goods in a competitive market? D. Complete the following short-run cost table using the information provided. 20 TFC AFC 12 TVC AVC 12 10 12 14 TC MC ATC

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 2CQQ

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