Draw each graph in handwritten form and take like (b) Explain the law of diminishing marginal utility with numerical as well as graphicalpresentations.(c) Construct the demand curve of a commodity based on the axiom of diminishingmarginal utility.

Graphical ExplanationDiminishing Marginal Utility GraphThis graph shows how the marginal utility…

Answered: (b) Explain the law of diminishing…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 2DQ

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The substitution effect implies that as the price of a substitute good. the demand for the original good (a) increases; decreases (b) decreases; decreases (c) decreases; increases (d) None of the above.
A utility function is given by the equation U = 20xe¬0.1x, where x is the number of glasses of wine consumed. (a) Show that this utility function has a maximum value and calculate the maximum utility. (b) Describe how marginal utility changes for glasses of wine consumed after the maximum utility is reached. Do you consider this reasonable? Give an explanation.
Given the utility function U = X0.5+Y0.5 and budget constraint I=Px X+ Py Y,(a) Is this utility function is homothetic?(b) Derive the consumer’s demand functions for goods X and Y.(c) Obtain the numerical values of the own-price elasticity, cross-price elasticity, and the income elasticity of demand for X and Y.(d) Derive the indirect utility function and the expenditure function for this consumer.e) Obtain the compensated demand functions for goods X and Y. (f) Prove that the Slutsky equation holds in this case.
(b) If a consumer spends all of his budget consuming exactly two goods, then is it possible that the law of downward-sloping demand does not hold for one of the goods?
9)----------- is the addition to total utility by the consumption of one additional unit of the commodity. A) Total utility B) Ordinal utility C) Average utility D) Marginal utility
If the utility function of an individual takes the form: U = U ( x 1, x2) = (x1 + 2) 2 (x2 + 3) 3 Where U is total utility, and x1 and x2 are the quantities of two commoditiies consumed: (a) Find the marginal-utility function of each of the two commodities (b) Find the value of the marginal utility of the first commodity when 3 units of each commodity are consumed.
Marginal utility is defined as the increment to total utility that results from the consumption of one more unit of some good or service. The equation for marginal utility is: Group of answer choices The change in total utility / the change in quantity The change in total utility / the change in total revenue The change in quantity / the change in total utility Total revenue / quantity demanded
Total Utility derived from the consumption of a product to a consumer is given by U = (20-0.50)'Q where Q is the number of units consumed Using a graphical representation, show what is the nature of variation in the utility with the increasing consumption of the product? Is it in line with the law of diminishing marginal utility? Explain.
s) Using the indifference curves, a budget line and a price change, show how we can derive an individual's demand curve for a product..
Assignment (1) Compatibility Mode. Saved to this PC ✓ esign Layout References Mailings Review View ons: On Problem 1 7 Problem 2 O Search (Alt+Q) Mario consumes only cheese and crackers. a. Could cheese and crackers both be inferior goods for Mario? Explain. Help Accessibility: Unavailable ▬▬▬ b. Suppose the cheese is a normal good for Mario while crackers are an inferior good. If Mario's income falls, what happens to Mario's consumption of crackers? What happens to his consumption of cheese? Explain. monica fa What is marginal rate of substitution (MRS) in Economics? Use an example to explain MRS. 2. D Foo
Ricky has utility function u=x'y. This implies that MUx=2xy. MUy=x². His income is 100. The price of y is 10. (a) Find his demand for x at price 20. (b) Find his demand for x at price 30. (c) Write down his demand function for x: that is, write down his demand for x as a function of the price of x.
It is proven mathematically that indifference curves are convex due to: (a) rising marginal rates of substitution. (b) the inverse association between the quantity demanded and the price. (c) costs decreasing in value. (d) the marginal rates of substitution being negative.

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(b) Explain the law of diminishing marginal utility with numerical as well as graphical presentations. (c) Construct the demand curve of a commodity based on the axiom of diminishing marginal utility.