The assumption that consumers always prefer more of a good to less requires that indifference curves slope upward from left to right. True False
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The assumption that consumers always prefer more of a good to less requires that indifference
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- Does the quantity of the good on the y-axis affect the consumer's utility if the indifference curve is vertical?Define A consumer prefers a higher indifference curve to a lower one.In analyzing consumer behavior, economists often use indifference curves to represent a consumer's preferences. An indifference curve shows the different combinations of two goods that provide the same level of utility to the consumer. As one moves along an indifference curve, the level of utility reflecting the consumer's willingness to trade off one good for another while maintaining the same level of overall satisfaction. A) Increases B) Decreases C) Remains constant D) Fluctuates unpredictably
- True or false. A change in prices or income can alter preferences and thus the indifference curves can shift.Could Figure 3.2 be a single indifference curve if preferences are monotonic?Indifference curves slopes down because there is a tradeoff between goods. If you give up some of one good, you must receive less of another in order to remain indifferent. True False
- 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.Economists use "indifference curves" to indicate individuals' preferences. These curves are parallel to each other and do not intersect. Which of the following statements is true? A) The further away an indifference curve is from the origin at (0,0), the lower is the individual's happiness. B) On a downward-sloping indifference curve, the points lower down (towards the right-hand-side) on the curve are preferred by the individual. C) The closer an indifference curve is to the origin at (0,0), the higher is the individual's happiness. D) The further away an indifference curve is from the origin at (0,0), the higher is the individual's happiness.On what portion of the demand function does total revenue rise as price rises? The price of tea cakes goes up by 1%. As a result, the quantity purchased of tea falls by 1.5%. If income rises and consumers buy more of a particular good, that good is? Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? What condition describes the optimal bundle of goods X and Y where utility is maximized [M=income, MU=marginal utility, P=price]
- Why does total utility increased as the consumer moves to an indifference curve farther from the origin? Why can’t indifference curves intersect?Since the consumer is indifferent between all points on an indifference curve, no point is preferred. True FalseThe following statement is true for consumer preferences: a) The axiom of weak monotonicity implies that the marginal utility of every good must always be positive. b) The axiom of weak convexity implies that the marginal utility of every good must always be positive. c) The axiom of strict convexity implies that the indifference curve exhibits diminishing MRS. d) The axiom of weak monotonicity implies that the MRS must always be negative. e) All of the above.
