Answered: Draw indifference curves that reflect…

Draw indifference curves that reflect the following preferences. a. Tea and coffee b. Pizza and Pepsi c. Banana and shrimp

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 12PA

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Concept explainers

Marginal Rate of Technical Substitution

MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.

Preferences and Utility Analysis

Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.

Question

Draw indifference curves that reflect the following preferences.

a. Tea and coffee

b. Pizza and Pepsi

c. Banana and shrimp

d. income and noise.

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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Step 1: indifference curve

Step 2: Part a).

Step 3: Part b).

Step 4: Part c).

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