Person A and B both have the same income, and there are only two goods in...

Person A and B both have the same income, and there are only two goods in the market: good X has the price of $6, good Y has the price of $4. Considering A and B may have different bundles for purchasing good X and Y, but they are on the same budget line with the same MRT and MRS, will their consumer surplus always be the same? or does it depend on the bundles?

Expert Solution

Both have same income , prices are same for both person . So they are no same budget line , slope of budget line is price ratio which is same . But utility is mazimized only at a single bundle where Marginal rate of substitution ( slope of indifference curve ) is equal to slope of budget line (tangency condition ) . The optimal bundle is unique and only one for a budget line and indifference curve . Since both A and B face the same budget line and indifference curve so their optimal bundle should be same .

A and B may have different bundles for purchasing good X and Y, so their consumer surplus will not be same . Consumer surplus depends on marginal utility . So consumer surplus depends on the bundles purchased .

Rahul Sunny answered 2 years ago

2. In the oligopoly market, only two companies A and B produce goods of the same...

2. In the oligopoly market, only two companies A and B produce goods of the same quality. Each company is involved in producing goods. The marginal cost and average cost are the same at 30. When the market demand function is Q=900-10P, answer the following questions - Draw the balance with Bertrand, and describe the process in which Bertrand's balance was drawn. -Draw the profits of each of the two companies in Bertrand's balance.

Two stars, A & B, have same color. This implies that a. Both stars emit same...

Two stars, A & B, have same color. This implies that a. Both stars emit same amount of light. b. Both stars located at equal distance from the earth. c. Both stars has the same temperature. d. None of the above 2. The horizontal axis of H-R diagram plots a. mass b. Luminosity c. apparent brightness d. temperature 3. Most stars (when plotted on a H-R diagram) would fall into a region called a. red giant b. main sequence c....

Suppose two countries have the same productivity per person for Goods X and Y. What would...

Suppose two countries have the same productivity per person for Goods X and Y. What would cause them to have trade in Goods X and Y?

. Consider two economies: Economy A and Economy B. Both economies have the same population, supply...

. Consider two economies: Economy A and Economy B. Both economies have the same population, supply of fiat money, and endowments. In each country, the number of young people born each period is constant at N, and the supply of fiat money is constant at M. Young people are endowed with y units of the consumption good but receive nothing when old. The only difference between these two economies is that people in Economy A have preferences that lean toward...

Consider two economies: Economy A and Economy B. Both economies have the same population, supply of...

Consider two economies: Economy A and Economy B. Both economies have the same population, supply of fiat money, and endowments. In each country, the number of young people born each period is constant at N, and the supply of fiat money is constant at M. Young people are endowed with y units of the consumption good but receive nothing when old. The only difference between these two economies is that people in Economy A have preferences that lean toward first...

Barbara purchases only two goods, salads, and notepads. Both are normal goods for Barbara. Suppose the...

Barbara purchases only two goods, salads, and notepads. Both are normal goods for Barbara. Suppose the price of salad decreases. Barbara’s consumption of notepads will most likely Select one: a. be unchanged as the two goods are not substitutes. b. increase due to the substitution effect. c. decrease since she will spend more of her budget on salads d. increase due to the income effect. ------------------------------------------------------------------------------------------------------------------------------------ 2. There are only two brands of tennis balls Tom purchases: “Wilson” and “Penn.”...

1. There are two goods, bread and butter. A person has spent all their income on...

1. There are two goods, bread and butter. A person has spent all their income on bread and butter. The price of bread is $2 and the price of butter is $4. This person tells you that the last unit of bread he consumed increased his utility by 50 utils; the last unit of butter he consumed increased his utility by 80 utils. Has this person maximized his utility? If not, should he consume more bread and less butter OR...

Consider the exchange economy. It consists of two individuals, A and B. The only two goods...

Consider the exchange economy. It consists of two individuals, A and B. The only two goods available for consumption are red wine and choco- late. The endowment of the economy is 64 units of red wine and 16 units of chocolate. A’s endowment is wa ? and ca ? ; B’s endowment is wb ? and cb ? . The utility functions for each individual are U = 2(wa ca )1/2 and UB = 10(wBcB)1/2, where wj and cj are...

B cells are activated by CD4 TH2 cells only if both cell types recognize the same...

B cells are activated by CD4 TH2 cells only if both cell types recognize the same antigen. The same epitope, however, does not need to be shared for recognition. 1. Discuss why this characteristic is important in vaccine design. 2. Provide an example of a conjugate vaccine used to stimulate the synthesis of IgG antibody against Haemophilus influenzae B polysaccharide.

“If country A and country B have the same level of real GDP per person, then people in both countries must enjoy the same standard of economic welfare.” Is this statement true or false?

Question 1 (Word limit 200 words) “If country A and country B have the same level of real GDP per person, then people in both countries must enjoy the same standard of economic welfare.” Is this statement true or false? If true, please explain your answer. If your answer is false, please list and explain two things that lead you to this conclusion. Question 2 (Word limit 150 words) Identify and explain the immediate effect of each of the...

Question