Aeb4334

AEB4334Assignment 1Joe Taylor 1) . Use the manner outing graph video boasting a liquidaters work out line and some impassivity curvatures to event the following questions (a through f). The consumers income is $600. a) What is the harm of unspoiled X? What is the price of commodity Y? We know the income of consumer is $600, so if we look at the intercept of the demand function, we see that the consumer could purchase 30 units of Y and spend all of the income. This being the case$600/30 indicates that the terms of not bad(predicate) Y is $20 and the cost of skinny X, $600/40, is lucifer to $15. b) Given the consumers income of $600, what is the highest level of avail the consumer force out hit? formulate. The highest level of utility can be achieved at the token where the consumer demand line is tangent to IC burn ii. It is the specify that represents the highest combination of high-priceds that lies on the highest indifference curve in spite of appearance the reckon line of the consumer. c) If the consumer is making an optimal choice, how many units of Good X should he or she consume and how many units of Good Y should he or she consume? Why? condone your answer. The consumer should tack to stringher a combination of goods that gives the consumer the same marginal utility per one dollar bill spent for both(prenominal) good X and Y.

This is the point where the bud take on line is tangent to IC curve ii. At this point, the consumer should consume 20 units of good X and 15 units of good Y. d) At the optimal consumption gal vanic pile, what is the Marginal Rate of su! rrogate? Explain how you found this answer. act the meaning of the Marginal Rate of Substitution at this bundle. At the optimal consumption bundle, the marginal roll of substitution is 30/40=3/4=.75 On IC curve ii, where the budget line is tangent to it, you follow the line to both axis. You can interpret the MRS as the consumer spontaneous to give up 3 units of good Y to get 4 units of good X. e) Suppose that the consumer is currently at bundle A....If you want to get a full essay, order it on our website: BestEssayCheap.com

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