Supplement to Unit - II BEHIND THE DEMAND CURVE: THE THEORY OF CONSUMER CHOICE Here‚ the purpose is to explain the derivation of the demand function and to provide an understanding of the consumer decision-making process. Consumer Preferences Individuals make choices based on their personal tastes and preferences. Tastes and preferences are shaped by many factors. Some of the factors are family environment‚ physical condition‚ age‚ sex‚ education‚ religion‚ and location. In the analysis that
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Name: ________________________ Class: ___________________ Date: __________ ID: A CH 11 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ ____ 1. Timmy makes $100 per week as a taxidermist. He spends all this income to buy pizza and hair gel. The price of a pizza is $10 and the price of a bottle of hair gel is $4. If Timmy buys 5 bottles of hair gel‚ then he buys ____ pizzas. a. 10 b. 4 c. 8 d. 20 e. None of the above answers is correct.
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Safety means protecting ourselves from any danger that may hurt us or endanger to our lives. Unsafe practice is a great peril to both life and property. A two wheeler rider who rides recklessly not only risks his own life‚ but also the other road users. School children getting run over by their same school vans or getting knocked down while crossing the road or getting drowned in die pond or falling from high places or getting electrocuted and so on; such news appear in the newspapers. This is
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a property of an indifference curve? Question 5 answers | | An indifference curve is convex to the origin / | | | The consumer is indifferent between any two points on an indifference curve / | | | The marginal rate of substitution diminishes as you move down the indifference curve | / | | As you move from one indifference curve to another indifference curve closer to the origin‚ utility increases | An indifference curve is Question
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using the concept of utility. Two approaches to the concept of utility (Cardinalists and Ordinalists approach) describe how utility can be gauged. The analysis of how consumers make choices can be done using the budget constraint and indifference curves. An indifference curve shows various bundles of commodities that make the consumer equally happy‚ or give him the same level of satisfaction. Utility Defined Utility is a measure of the satisfaction that a consumer gets from consuming a commodity or
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can graph some of his indifference curves. The consumer will choose the “best” indifference curve that he can reach given his budget. But when you try to do this‚ you have to ask yourself‚ “How do I find the most desirable indifference curve that the consumer can reach?” The answer to this question is “look in the likely places.” Where are the likely places? As your textbook tells you‚ there are three kinds of likely places. These are: (i) a tangency between an indifference curve and the budget line;
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flipside‚ indifference can be love’s opposite in the sense that love and hate both share a level of feeling and having put thought into something. Indifference on the other hand means there seems to be an absence of feeling making it the opposite of both love and hate. This theory seems to work for all the statements except the last one about life and
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PART TWO Producers‚ Consumers‚ and Competitive Markets Chapter 3 Consumer Behavior Teaching Notes Now we step back from supply and demand analysis to gain a deeper understanding of what lies behind the supply and demand curves. It will help students understand where the course is heading if you explain that this chapter builds the foundation for deriving demand curves in Chapter 4‚ and that you will do the same for supply curves later in the course (beginning in Chapter 6). It
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xA xB . Suppose that the price of apples is 1‚ the price of bananas is 2‚ and Charlie’s income is 40. (a) On the graph below‚ use blue ink to draw Charlie’s budget line. (Use a ruler and try to make this line accurate.) Plot a few points on the indifference curve that gives Charlie a utility of 150 and sketch this curve with red ink. Now plot a few points on
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illustrate a consumer’s preferences over them with an indifference map. Draw an indifference map with three indifference curves. b)There are a few standard assumptions about what an indifference map can and cannot look like. Which are these assumptions‚ and what reasoning lie behind them? 3. a)What is the marginal rate of substitution‚ MRS? State the definition and explain‚ in words‚ what it means. b)MRS will have an influence on the shape of the indifference curve. What influence? 4. a)Often we assume
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