If marginal rate of substitution between wine and cheese is -1 and the marginal rate of...

If marginal rate of substitution between wine and cheese is -1 and the marginal rate of the product transformation between two goods is -2, what should be done in this economy to increase consumers’ utility? Support your answer by a graph.

Expert Solution

Rahul Sunny answered 1 year ago

1. The marginal rate of substitution is ________________ (Select all that apply)

1. The marginal rate of substitution is ________________ (Select all that apply)a. Equal to the slope of the budget line at an optimal point if the optimal point is not at a corner.b. How much of each good a consumer can afford.c. The amount of one good an individual would be willing to trade for a different good and be just as well off.d. The slope of the indifference curve.e. Equal to the price ratio at an optimal point if...

assumption of diminishing marginal rate of substitution means that

The marginal rate of substitution measures the distance between one indifference curve and the next one.

Is the following statement true or false? Briefly explain your answer. " The marginal rate of substitution measures the distance between one indifference curve and the next one."

問題 1 The marginal rate of substitution is the slope of the utility curve. the slope...

問題 1 The marginal rate of substitution is the slope of the utility curve. the slope of the contract curve. the slope of the utility possibilities curve. none of the above. 10 分問題 2 The Edgeworth Box should lie inside the PPF. lie partially inside the PPF. lie completely outside of the PPF. never touch the PPF. 10 分問題 3 The Second Fundamental Theorem of Welfare Economics requires that indifference curves be convex to the origin....

1. The marginal rate of substitution is important because it tells me the kind of trades...

1. The marginal rate of substitution is important because it tells me the kind of trades I could make to increase my utility true or false 2. The second order conditions for utility maximization will always be satisfied for a person who has preferences that obey the transitivity axiom. true or false 3. Expenditure minimization, the dual consumer problem, may be thought of as a process of fixing a budget line and finding which indifference curve is tangent to it....

1.14. What are the relationships among marginal utilities, the marginal rate of substitution, and the slopes...

1.14. What are the relationships among marginal utilities, the marginal rate of substitution, and the slopes of indifference curves? 1.15. Explain how the assumption that "a larger basket of commodities is always preferred to a smaller one" implies (a) that indifference curves lying farther out from the origin are associated with higher utility values, (b) that marginal utilities are positive, and (c) that indifference curves are downward sloping.

Question 1 In the video, the marginal rate of substitution decreases as we move down along...

Question 1 In the video, the marginal rate of substitution decreases as we move down along the indifference curve because: Select one: a. the marginal utility of coffee and the marginal utility of pizza both rise. b. the marginal utility of coffee falls and the marginal utility of pizza rises. c. the marginal utility of coffee rises and the marginal utility of pizza falls. d. the marginal utility of coffee and the marginal utility of pizza both fall. Question 2...

1. Explain the concept of marginal rate of technical substitution. What does a MRTS of 4...

1. Explain the concept of marginal rate of technical substitution. What does a MRTS of 4 mean? Is there any difference between production function and Iso-quant? Explain institutively what might cause the marginal product of labor to become negative.

Consider the utility function = . Find the marginal rate of substitution and show that the...

Consider the utility function = . Find the marginal rate of substitution and show that the utility function satisfies the property of diminishing marginal rate of substitution.

he marginal rate of substitution is the Group of answer choices rate at which the consumer...

he marginal rate of substitution is the Group of answer choices rate at which the consumer increases utility. tradeoff rate between the two goods under consideration at any particular point. total utility derived at any point. absolute value of the indifference curve.

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