1. __________ Can also cause an upward shift in the budget line a. Higher prices
ID: 1193753 • Letter: 1
Question
1. __________ Can also cause an upward shift in the budget line a. Higher prices b. Higher indifference curve e. Higher utility d. Lower price 2. The rate of substitution along the indifference curve implies. a. Utility trade ? off b. commodity trade-off c. relative price d. relative utility of commodities 3. Another indifference curve corresponds to another level of satisfaction because of the change in a. the budget b. prices C. consumption level d. utility 4. The maximum satisfaction point of a budget line is where it is tangent to an indifference curve because a. higher indifference curve yield more satisfaction b. budget can only buy the satisfaction of the indifference curve within it c. The highest indifference curve within a budget line is that which is tangent to it d. all of the foregoing 5. Deviation from the quasi-marginal condition results in less satisfaction because of a. relative price b. commodity trade off c. relative utility commodityExplanation / Answer
Ans: 1) a) Lower price
If other thing remains same the price of a commodity lower the demand for that commodity increases, so the budget line shift upward showing that more quantity available due to a price fall.
2) d) relative utility of commodities.
The indifference curve represents Marginal Rate of Substitution. The Marginal Rate of Substitution is used to attain maximum utility.
3) d) Utility
Another level of stisfaction means another level of utility.
4) d) all of the foregoing .
The consumer equilibrium is the point where the budget line is tangent to the indifference curve. Budget line is our possible combination and indifference cure is our marginal rate of substitution.
5) a) Relative Price
The percentage deviation of Quasi-optimal price from marginal cost is inversily propotional to its price elasticity of demand.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.