User Account

All Pages

What is the marginal rate of substitution

Assignment Help Business Economics
Reference no: EM132795136

Suppose x1 is a "good" and good x2 is a "bad". That is, the consumer is better off with more units of x1, but worse off with more units of x2.

a) Draw several indifference curves that can represent these two goods (put "good" on horizontal axis and "bad" on vertical axis). Label the axes and indifference curves.

b) Now suppose x1 is a neutral good, and x2 is a regular good. In other words, the consumer is indifferent between different levels of consumption of x1, while the consumer is better off the more x2 he consumes. Draw several indifference curves that represent these two goods (put "good" on vertical axis and "neutral" on horizontal axis). Label the axes and indifference curves. Page 5

c) What is the Marginal Rate of Substitution (MRS) of the indifference curves in part b)?

d) How would the MRS change if x2were the neutral good and x1 were the regular good?

Reference no: EM132795136

Questions Cloud

Discussing a change in price or quantity in some market : Find an article related to agriculture/agribusiness in a newspaper or magazine illustrating/discussing a change in price or quantity in some market.
Which financial statement do find long-term liabilities : List the page number from the most recent Form 10-K where you found long-term liabilities for your company. What types of long-term liabilities does the company
Why government should emphasize economic growth : A. Propose TWO (2) reasons why government should emphasize economic growth as a part of its mandate.
Encouraging the consumption of healthy food : c) Is the government going to be successful in encouraging the consumption of healthy food? Briefly explain.
What is the marginal rate of substitution : Suppose x1 is a "good" and good x2 is a "bad". That is, the consumer is better off with more units of x1, but worse off with more units of x2.
Compute the share of AA in the expense of the joint operator : The management fee for operating the yacht business for 2020 was P11.2M. Compute the share of AA in the expense of the joint operator for 2020
Explain the potential culpability of each party : Explain the potential culpability of each party. Include possible civil or criminal penalties for each party - How could Armstrong have protected himself
Why are carbohydrates considered most valuable energy source : Why are carbohydrates considered our most valuable energy source? And, list all of the various classifications and forms of carbohydrates found in your textbook
Implement a child-care subsidy program : Suppose that the government is currently considering whether to implement a child-care subsidy program for low-income families.

Reviews

Write a Review

Business Economics Questions & Answers

  Use of native americans in wwi and wwii as code talkers

Discuss the use of Native Americans in WWI and WWII as code talkers. Explain how the use of American Indian

  Calculate the accounting profit and the economic profit

Grace owns and operates a small pottery firm.Grace hires an assistant at $12,000/year, pays annual rent of $5000 for her shop, and spends $20,000/year on materials. Calculate the accounting profit and the economic profit for Grace’s pottery business...

  Neoclassical model of business fixed investment

In the neoclassical model of business fixed investment, under what conditions will firms find it profitable to add to their capital stock?

  What are the implications of the shift from medical care

What are the implications of the shift from medical care to the focus on overall health conditions?

  Use calculus to derive your firm long-run cost function

Your firm has an estimated production function q = 1/2KL^2. Further, the rental rate of capital is $80 and the wage rate is $40. You are considering long-run prospects. Use calculus to derive your firm's long-run cost function.

  Accommodate new payer and consumer expectations

The traditional management style of hospitals has been hierarchical and internally focused. What are three important challenges that face hospitals to accommodate new payer and consumer expectations?

  Compare a user-entered string with bird

Write code to compare a user-entered string with "bird" and print "Found a bird! Spring has sprung." when the strings match and print "The bird has flown." when they don't. Use If-Else branching statements.

  Firm policy regarding cases of theft of company property

Your company has a firm policy regarding cases of theft of company property. Used company equipment is on a table to be sold by bid each month. You see a valued employee who is 2 months from retirement slip an electric drill from the table and put it..

  Unemployment rate in the united states for the given year

Refer to the data in the above scenario. What is the unemployment rate in the United States for the given year?

  Construct the pbt graph

The time horizon i years. Is there a meaningful IRR? Is the project attractive? Construct the PBt graph.

  Draw a diagram illustrating how industry responds to policy

An industry's marginal abatement cost is MAC=2000-e. regulator controls emissions by selling 500 permits. Though, industries are also given option of paying a fee of $1000 per unit of emissions for which y do not hold a permit. Draw a diagram illu..

  Maximum price you are willing to pay

What is the maximum price you are willing to pay for this stock today?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd