To do so let us examine how much each consumer spends for each combination. Combination B is not affordable If the consumers income 60, then the optimum is given by Combination B.
What do you mean by the budget set of a consumer? What is budget line? Explain why the budget line is downward sloping. A consumer wants to consume two goods. The prices of the two goods are Rs.
Questions 5, 6 and 7 are related to question 4. What happens to the budget set if both the prices as well as the income double? Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her entire income.
The prices of the two goods are Rs 6 and Rs 8 respectively. Suppose a consumer wants to consume two goods which are available only in integer units.
If a consumer has monotonic preferences, can she be indifferent between the bundles 10,8 and 8, 6? What can you say about her preference ranking over the bundles 10, 1010, 9 and 9, 9? Suppose your friend is indifferent to the bundles 5, 6 and 6, 6.
Are the preferences of your friend monotonic? Suppose there are two consumers in the market for a good and their demand functions are as follows: Find out the market demand function. Suppose there are 20 consumers for a good and they have identical demand functions: What is the market demand function?
Consider a market where there are just two consumers and suppose their demands for the good are given as follows:N. Gregory Mankiw – Principles of Economics Chapter THE THEORY OF CONSUMER CHOICE Solutions to Problems and Applications 1.
b. Figure 10 shows the effect of the frost on Jennifer's budget constraint. Since the price of coffee rises, her budget constraint swivels from BC1 to BC/5(1). The theory of consumer choice examines a.
the determination of output in competitive markets. b. the tradeoffs inherent in decisions made by consumers. c. how consumers . Indifference curves measure the consumer's willingness to trade one good for another good while maintaining a constant level of satisfaction.
True When drawn on a graph that measures the quantity of a good on each axis, indifference curves are usually straight lines that slope downward (negatively). Chapter 21 - The Kinetic Theory of Gases P 3 sin sin m s() 10 kg N s v FNm t − Δ ⎡⎤⎣⎦°− − ° Δ N m Pa2 F P A == = P Use the equation describing the kinetic-theory account for pressure: 2 2 0 32 N mv P.
ABSTRACT - Motivation-need theories are reviewed, their implications to consumer behavior investigated, and the various findings and concepts integrated in formulating a .
CHAPTER 3 Consumer Preferences and Choice 61 4 This is like producing a given output with fewer or cheaper inputs, or achieving the same medical result (such as control of high blood pressure) with less or weaker medication. The distinction between cardinal and ordinal utility is important because a theory.