Aeb4334

AEB4334Assignment 1Joe Taylor 1) . Use the typeface outing graph video demo a liquidaters work out line and some tranquillity warps to event the following questions (a through f). The consumers income is $600. a) What is the harm of dependable X? What is the price of right-hand(a) 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 vertical Y is $20 and the cost of rock-steady X, $600/40, is lucifer to $15. b) Given the consumers income of $600, what is the highest level of public utility company the consumer faeces hit? formulate. The highest level of utility can be achieved at the token where the consumer demand line is tangent to IC scent ii. It is the specify that represents the highest combination of unspoilts that lies on the highest indifference curve deep down 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? rationalize 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 good X and Y.

This is the point where the bud stun 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 galvanising pile, what i s the Marginal Rate of surrogate? Expla! in how you found this answer. encounter 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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