00 AT&T; LTE 8:24 PM Assignments Micro Assignment Detail Submission Grade How is

Question

00 AT&T; LTE 8:24 PM Assignments Micro Assignment Detail Submission Grade How is a budget line similar to a production possibilities frontier? How do they differ? Question 2 If the price of a good rises and the consumer's budget remains the same, what happens to the consumer's consumption possibilities? Question 3 What is the utility-maximizing rule? Question 4 Explain why total utility is maximized when the marginal utility per dollar from a good is equal to another good? Question 5 Summarize the law of the "principle of diminishing marginal utility" describing the process of utilitv maximization Courses Calendar To Do Notifications Messages

Explanation / Answer

ans 1=A budget line defines the bounds to a household’s consumption alternatives. It shows a household's consumption possibilities, & resembles the PPF which separates choices that are attainable from those that aren’t. Like the budget line, the PPF demonstrates that scarcity means tradeoffs The difference between the two is that a budget line is a straight line. This is so as its slope is yielded by the relative prices of the 2 goods that are considered. On the other hand the production possibilities curve is characteristically curved outward on account of the law of diminishing returns. Options outside of it are not attainable & options inside it are wasteful. In course of time , an economy which is growing will tend to move its PPF outwards.

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