Be as specific as possible and always include explanations that describe your reasoning.

Suppose you're writing a report for local city council members on the economic situation facing consumers. The city council members would like the following questions answered so that they can better understand consumer behavior and the impact of potential policies on the local economy.

1.Consumer purchasing behavior is driven by consumer preferences. The local city council members would like to better understand consumer preferences and the requirements needed to analyze consumer preferences. What does restricting consumer preferences to be transitive mean, and what are the implications of transitivity for consumer indifference curves?

A.What does the Diminishing Marginal Rate of Substitution mean, and what are the implications of a Diminishing Marginal Rate of Substitution for consumer indifference curves?

B.What is the relationship between the Diminishing Marginal Rate of Substitution and the Law of Diminishing Marginal Utility?

2.Consumer budgets are likely to be impacted by changes in market conditions. Along those lines, how do the prices of products factor into the slope of a consumer's budget line?

A. Suppose fast food meals are on the x-axis of the graph for the budget line and movie theater tickets are on the y-axis. If the price of fast food meals decreases, how does this impact the budget line?

B.If consumers'budgets for fast food meals and movie theater tickets increases, how does this impact the budget line?

C.Explain how a gift certificate for fast food meals would impact a consumer's budget line in comparison to a cash gift.

Econ 3310