Question
Use graphs where necessary and EXPLAIN whether the following statements are true or false: (a) If someone has the utility function U = 1,000
Use graphs where necessary and EXPLAIN whether the following statements are true or false: (a) If someone has the utility function U = 1,000 + 2 min (x, y) then x and y are perfect complement goods for that person. (b) With quasilinear preferences, the slope of indifference curves is constant along all rays through the origin. (c) The marginal rate of substitution measures the distance between one indifference curve and the next one. x2 (d) Ambrose has an indifference curve with equation x = 20 - 4x1/2. When Ambrose is consuming the bundle (4,16), his marginal rate of substitution in absolute value is 5/4.
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Microeconomics
Authors: Robert Pindyck, Daniel Rubinfeld
8th edition
978-0132870436, 132870436, 013285712X, 978-0133371178, 133371174, 978-0132857123
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