Can indifference curves be straight lines

Author: fohe

August undefined, 2024

WebQuestion: QUESTION 9 If two goods are both desirable and preferences are convex, then there must be a kink in the indifference curves. indifference curves must be straight lines. if two bundles are indifferent, then an average of the two bundles is worse than either one. o the marginal rate of substitution is constant along indifference curves. None of … WebAn indifference curve that is a vertical straight line means: a. the goods are perfect substitutes.b. the goods are perfect complements.c. the good on the vertical axis gives …

Slope of the Budget Line - Economics Stack Exchange

Webarrow_forward. For the Income-Consumption Line & Engel Curve: (kindly place Good A on the X-axis & Good B on the Y-axis) If the consumer's tastes are given by the Indifference curves schedule and Pa = P1.00, Pb= P1.00 and original budget = P10.00, what happens if budget decreases to P6.00 and then increases to P14.00, assuming that tastes and ... WebRefer to the above diagram, showing Budget Constraint BC and Indifference Cures I1, I2, and I3. In this instance: options: the consumer can choose any point on or below the budget constraint line BC. the consumer will find that every point along the I3 line is outside the budget constraint. importance of improving customer service

When would indifference curves be linear, vertical, or horizontal?

WebStraight-line indifference curves of perfect substitutes are shown m Fig. 8.7. The better substitutes the two goods are for each other, the closer the indifference curve approaches to the straight-line so that when the … WebEconomics. Economics questions and answers. Question 5 When two goods are perfect substitutes, the marginal rate of substitution is constant. indifference curve is a downward-sloping straight line. indifference curve is a vertical straight line. Both a … WebDec 29, 2024 · Marginal Rate of Substitution: The marginal rate of substitution is the amount of a good that a consumer is willing to give up for another good, as long as the new good … importance of improving employee relations

7.3 Indifference Curve Analysis: An Alternative …

An indifference curve that is a vertical straight line means: - Docsity

WebTo illustrate this graphically, we can plot Tiger's budget constraint (20L + C = 68) and an indifference curve that passes through the optimal point (2.5, 45) on a separate graph. Since his utility function is U(L, C) = L^2 * 200C, his indifference curves will be straight lines that pass through the origin, with a slope of -1/(20*200) = -1/400. WebTranscribed Image Text: 1. Multiple choice: Choose only one correct answere a) If a person's indifference curves can be represented as downward-sloping straight lines, the person views the goods as substitutes but not perfect perfect substitutes perfect complementse complements but not perfecte economic badse importance of improving customer experienceWebIncome leads to a shift of the line, but same slope-With change in price, the slope changes-Preferences-Indifference curves show various bundles in which the consumer is equally happy, indifferent-The slope at any point it the rate at which the consumer is willing to substitute one good for the other, this is the marginal rate of substitution ... importance of improving physical health

"WebBy definition, in economics when we consider indifference curves, we say "more is better", that is the farther of the indifference curve is, the better. So we would always chose the … " - Can indifference curves be straight lines

Can indifference curves be straight lines

Jack earns $20 per hour and he gets an allowance of $100 per...

Web5) If two goods are both desirable and preferences are convex, then a. there must be a kink in the indifference curves. b. indifference curves must be straight lines. c. if two bundles are indifferent, then an average of the …

Did you know?

WebEven in the one-person country, where no logical problem of defining indifference curves can arise, such a total-value concept would seem to jumble together hopelessly budget lines and indifference curves. And even if we avoid any con- ... consumption paths must be straight lines and at a given px/py their respective WebOne characteristic of indifference curves is that A.they must intersect at the origin. B.they cannot intersect. C.they are straight lines. D.they have a positive slope. 3.The marginal rate of substitution is the same thing as the marginal utility of a good. B. change in the quantity of one good that changes the utility received by one unit. C.

WebThus the indifference curves are straight lines with a slope of − 1. Figure 3.3 The important fact about perfect substitutes is that the indifference curves have a constant slope. Suppose, for example, that we graphed blue pencils on the vertical axis and pairs of red pencils on the horizontal axis. WebAug 30, 2024 · Indifference Curve: An indifference curve represents a series of combinations between two different economic goods, between which an individual would …

WebThis is the diminishing marginal rate of substitution. The rate gives a convex shape to the indifference curve. However, there are two extreme … Web91. A consumer’s preferences for right shoes and left shoes can be represented by indifference curves that are a.bowed out from the origin b.bowed in toward the origin c.straight lines d.right angles 92. When two goods are perfect complements, the indifference curves will a.have a positive slope. b.be right angles.

WebStudy with Quizlet and memorize flashcards containing terms like What are the four basic assumptions about individual preferences?, Can a set of indifference curves be upward sloping? If so, what would this tell you …

WebSolution. Verified by Toppr. Correct option is A) A constant marginal rate of substitution would mean that the consumer will only be able to choose a equal number of both … literally wind and water wsjWebTherefore, line OB and curve JK cannot be indifference curves. Similarly, in the case of a vertical indifference line, aQx, and the movement from e to a means an increase in the quantity of Y by ea, while quantity of X remains the same, OQx. If MU of ea>0, the total utility will increase. ... The straight line joining the two points A and B is ... importance of improving mental healthWeb– The same as reaching the highest indifference curve she can, given her budget constraint. ... Best Affordable Bundle 22 3-23 A Corner Solution Very strong preference for food 23 3-24 Equilibrium with Perfect Substitutes Indifference curves are straight lines Corner solution exists 24. importance of improving productivityWebCan the indifference curve be a straight line? Perfect Substitutes. Two goods are said to be perfect substitutes if a consumer is indifferent between the consumption of any of the … importance of improvisationWeb(3) View is [...] preferred to less because [...](4a) The marginal ratings of substitution is constant, where indifference curves are straight lines (4b) Who marginal rate of substitution is constant, where indifference curves can convex, Sack a set to indifference curves be upwards slanted? importance of imsWebMay 19, 2024 · An indifference curve far from the origin is referred higher indifference curve and near to one origins is calling a lower indifference curve. An indifference map can be shown as follows: An indifference cam is a curve on which all the combinations of two commodities give ampere consumer equal satisfaction. importance of imvicWebA horizontal or vertical line. Consider the CES utility function: U (Qx, Qy) = (1/Qx+1/Qy)^-1 i. Plot the indifference curves for U = 0.5, U = 1, and U = 1.5. Based on your plot, would an individual with these preferences view X and. In the endogenous view of the money supply a) the Ms curve is vertical. importance of improving writing skills