ECON 102 Lecture Notes - Lecture 15: Budget Constraint
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1.
Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should
A. All have the same marginal rate of substitution | ||||||||||||||||||||||||||
B. All buy more of the least expensive good | ||||||||||||||||||||||||||
C. All end up with the same bundle of goods | ||||||||||||||||||||||||||
D. All have the same level of satisfaction 2. Consider an indifference map with food on the vertical axis and shelter on the horizontal axis. If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:
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