Question

In: Economics

A. Explain and illustrate an indifference curve of a complimentgood. with a curveB. state...

A. Explain and illustrate an indifference curve of a compliment good. with a curve

B. state whether true or false. Explain your answer. If price of good x rises holding all other prices and income constant.

- The substitution effect alone will make a consumer buy more of x if x is inferior.

- The income effect will make a consumer buy more of x if x is a normal good.

use graphs in all your explainations

Solutions

Expert Solution


For perfect complement, the Indifference Curves would be 'L' shaped because goods are used in fixed proportion and increasing either of the goods beyond the fixed proportion wouldn't increase the utility of the consumer.

 

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

HEALTH ECONOMICS CLASS Indifference Curves and Preferences a. Using a picture of an indifference curve, illustrate...
HEALTH ECONOMICS CLASS Indifference Curves and Preferences a. Using a picture of an indifference curve, illustrate graphically the concept of diminishing marginal returns. b. When we say that a consumer’s utility function is U (H, X), what assumption are we making as economists that non-economists sometimes disagree with?
1. The ultimate purpose of indifference curve analysis is to illustrate that: 2. The price of...
1. The ultimate purpose of indifference curve analysis is to illustrate that: 2. The price of a bus ride decrease, but the total revenue of the bus company does not change. This means the demand for the bus rides must be approximately 3. If, when the price of a product rises from $1.50 to $2, the quantity demanded of the product decreases from 1,000 to 900, the price elasticity of demand coefficient, using the midpoint formula, is
Explain the indifference curve and its relationship to the demand curve, using an example.
Explain the indifference curve and its relationship to the demand curve, using an example.
Explain the indifference curve and its relationship to the demand curve, using an example.
Explain the indifference curve and its relationship to the demand curve, using an example.
Q 7 (a) What are indifference curves? (b) State and explain the properties of indifference curves....
Q 7 (a) What are indifference curves? (b) State and explain the properties of indifference curves. (c) Explain what factors could cause shift in the budget line.
Define indifference curve approach and explain the conditions of consumers equilibrium
Define indifference curve approach and explain the conditions of consumers equilibrium
Graphically illustrate the health effectiveness curve. Briefly explain the curve.
Graphically illustrate the health effectiveness curve. Briefly explain the curve.
1) a)Explain what is meant by the terms indifference curve, the marginal substitution fraction and the...
1) a)Explain what is meant by the terms indifference curve, the marginal substitution fraction and the budget condition in consumer theory. b) The benefit to a consumer depends on the benefits x1 and x2 . Explain why the consumer optimal choice of goods will not change if the prices of the two goods double, if the income at the same time also doubles. c) A consumer has a utility function that depends on the goods x1 and x2. The goods...
At equilibrium, the slope of the indifference curve is   (a ) equal to the slope of...
At equilibrium, the slope of the indifference curve is   (a ) equal to the slope of the budget line , (b) greater than the slope of the budget line, (c) smaller than the slope of the budget line or can either be equal, greater or smaller than the slope of the budget line.
4. The indifference curve between a good and garbage is positively sloped. True or false? Explain.
4. The indifference curve between a good and garbage is positively sloped. True or false? Explain.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT