1. Interpret the figure below that illustrates Sally's budget line and her preferences. a. At what point the marginal rate of substitution is equal to the relative price? b. Is it possible for Sally to attain the new indifference curve? Why? c. If Sally has Php 60 a week budget. What is the price of oranges and apples based on the given quantity in the budget line? d. Budget equation Figure 1 Figure 10 10 15 30 Oranges (number per wook) Hotdogs (number per week) Apples (number per week) Hamburgers (number per week)

1. Interpret the figure below that illustrates Sally's budget line and her preferences. a. At what point the marginal rate of substitution is equal to the relative price? b. Is it possible for Sally to attain the new indifference curve? Why? c. If Sally has Php 60 a week budget. What is the price of oranges and apples based on the given quantity in the budget line? d. Budget equation Figure 1 Figure 10 10 15 30 Oranges (number per wook) Hotdogs (number per week) Apples (number per week) Hamburgers (number per week)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 8P

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Leah consumes at a point on her budget line where her marginal rate of substitution is less than the magnitude of the slope of her budget line. As Leah moves towards her best affordable point, she will move to Select one: A. a higher indifference curve. B. a higher budget line. OC. a lower indifference curve. OD. a tangent point on the same indifference curve. O E. a lower budget line. Clear my choice
Explain in detail what are indifference curve and what do they measure. What are the three characteristics of indifference curves, MRS, slope of IC curve and the budget line? What is budget line and what does it represent. Explain with formula and graph what is the point of consumer’s equilibrium, conditions of the equilibrium, and how does this equilibrium shift in (a) Income effect; (b) Price effect and (c) substitution effect and explain the pivot under price effect and under substitution effect. What is PCC?
please only do: if you can teach explain each partc: what does it mean? can you show graphs: For these to be optimal choices with such preferences, the indifference curve through a must lie entirely on or above the budget line associated with (p, w), and simi- larly for r' for the budget line associated with (p', w'). how do you know this:Because each of these bundles lies below the other budget line, this implies that the indifference curves must cross, which is impossible. can you show graphs: note that (3,1) is a conver combination of x and x', so for conver preferences must be weakly preferred to x (the less preferred bundle between a and a'). But then the bundle (3,5/3) must be strictly preferred z, contradicting that is optimal given the initial budget set
36. What is substitution effect an income increase leading to the outward budget line and IC price of a good change leading to the relative prices change and choice of individual to consume a cheaper good more both prices of goods change in the same direction and no change in consumption ratio อื่นๆ: 37. What is 'not' correct about income effect? income effects results from changes in lower good prices Income effects results from the move in the budget constraint outward income effects results from the move in the budget constraint inward income effects can be seen along the same IC O อื่นๆ:
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