ECN 104 Lecture Notes - Normal Good, Inferior Good, Marginal Utility
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Assignment 2 (each question is worth of 3. 5 points) Suppose that the price of wine she buys is equal to the price of cheese she buys. Refer to the diagram above where xy is the relevant budget line and i1, i2, and i3 are indifference curves. The equilibrium position for the consumer is at: any point on xy, point m, point k, point j, refer to the diagram above where xy is the relevant budget line and i1, i2, and i3 are indifference curves. Point m: is the consumer"s equilibrium position, is unobtainable, is inferior to point n, entails the highest attainable level of total utility, suppose x is a normal good. The marginal utility of alpha is 40 and the marginal utility of beta is 20. A consumer is in equilibrium and is spending income in such a way that the marginal utility of product x is.