A consumer buys only two goods, X and Y. No other goods exist and there is no possibility of saving. The marginal utility of X is independent of the quantity of Y consumed, and the marginal utility of Y is independent of the quantity of X consumed. MUX is constant no matter how he consumes, but MUY falls as consumption increases. In the initial equilibrium he consumes one of each good. How much can you infer about the following: a.) The slope of the indifference curve b.) The curvature of the indifference curve c.) Whether the marginal utility of money is constant, rising, or falling as money income increases. d.) the income elasticity of demand for Y e.) The price elasticity of demand for X.
A consumer buys only two goods, X and Y. No other goods exist and there is no possibility of saving. The marginal utility of X is independent of the quantity of Y consumed, and the marginal utility of Y is independent of the quantity of X consumed. MUX is constant no matter how he consumes, but MUY falls as consumption increases. In the initial equilibrium he consumes one of each good. How much can you infer about the following: a.) The slope of the indifference curve b.) The curvature of the indifference curve c.) Whether the marginal utility of money is constant, rising, or falling as money income increases. d.) the income elasticity of demand for Y e.) The price elasticity of demand for X.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 2QFR
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A consumer buys only two goods, X and Y. No other goods exist and there is no possibility of saving. The marginal utility of X is independent of the quantity of Y consumed, and the marginal utility of Y is independent of the quantity of X consumed. MUX is constant no matter how he consumes, but MUY falls as consumption increases. In the initial equilibrium he consumes one of each good. How much can you infer about the following:
a.) The slope of the indifference curve
b.) The curvature of the indifference curve
c.) Whether the marginal utility of money is constant, rising, or falling as money income increases.
d.) the income elasticity of demand for Y
e.) The price elasticity of demand for X.
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