Answered: Draw a map of indifference curves for a…

Draw a map of indifference curves for a person in the following cases: She likes vegetables twice as much as meat. She likes going to the theater, but not to the movie

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section21.1: The Budget Constraint: What The Consumer Can Afford

Problem 1QQ

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Concept explainers

Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.

Question

Draw a map of indifference curves for a person in the following cases: She likes vegetables twice as much as meat. She likes going to the theater, but not to the movies.

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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Arthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a positive amount of satisfaction, but he is neutral as far as bread is concerned, i.e. He doesn't care if he consumes bread or not. Consuming bread does not give him positive or negative satisfaction. Please draw one of Arthur’s indifference curves for bread and chocolate, measuring bread on the vertical axis and chocolate on the horizontal axis.
Kevin likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following diagram shows two of Kevin's indifference curves for going to ballgames and symphonies. With Kevin's initial budget constraint (BC1), he chose to go to five symphonies and five baseball games per month (point X). Then his budget constraint shifted to BC2, and he chose to go to four symphonies and four ballgames per month (point Y). BALL GAMES 8 10 I I I I 4 5 SYMPHONIES BC BC B 10 Of the following choices, which could have shifted Kevin's budget constraint from BC₁ to BC2? Check all that apply. The price of symphony tickets increased while his income and the price of baseball tickets stayed the same. His income increased while the prices of baseball and symphony tickets stayed the same. The prices of both baseball and symphony tickets increased while his income stayed the same. His income decreased while the prices of baseball and symphony…
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A consumer has a budget set aside for entertainment during the year, and they spend the budget on concerts and plays. The consumer has a strong preference for attending concerts over plays: the two activities are substitutes, but not very strong substitutes. Sketch the indifference curves for this consumer on a graph, with concert tickets on the vertical axis and play tickets on the horizontal axis. Briefly explain why the consumer might ultimately choose to purchase a large number of play tickets, even though they have a strong preference for concerts. Include a budget line on your graph to illustrate this case.
Suppose you have an income of $24 and the only two goods you consume are apples (x1) and peaches (x2). The price of apples is $4 and the price of peaches is $3. Suppose that your optimal consumption is 4 peaches and 3 apples. a. Illustrate this in a graph using indifference curves and budget lines. b. Now suppose that the price of apples falls to $2 and I take enough money away from you to make you as happy as you were originally. Will you buy more or fewer peaches? Provide a graphical representation.