Directions Please answer 5 of the following questions Be sur

Directions: Please answer 5 of the following questions. Be sure to provide detail in your responses. It is also important that you emphasize the technical aspects of the relevant models in your answers. Be careful that you state your responses correctly-for example, change in demand can\'t be used where change in quantity demanded is appropriate, etc. Good luck!!

Solution

a) An indifference map shows the different combination of goods that a consumer can consume to attain a given level of utility.

b) The negative slope of indifference curve shows that the marginal utility decreases as the quantity consumed decreases.

The convexity preference tells that for consumer more is better.

c) The constrained utility maximization rule is

MRS = slope of budget constraint

It implies that utility will be maximum given the constraint where the slope of indifference curve representing utility is tequal to the slope of budget line.

* can do only these many sub-parts. for solution to other sub-parts please post as a different question.