Top Posters
Since Sunday
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
r
4
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
MrsAngelD MrsAngelD
wrote...
Go to Answer
Posts: 322
Rep: 7 0
6 years ago
For each of the following statements, define all of the underlined terms. Then, explain why the statement is true or false.
a.   If a consumer views two goods as perfect substitutes then their optimal choice will be a corner solution.
b.   The substitution effect from a price increase states that the consumer will always choose a smaller amount of that good to consume. However, the income effect states that consumption can move in either direction.
c.   Suppose Alf and Bo have convex indifference curves. Alf likes units of "X" more than units of "Y" but Bo likes units of "Y" much more than units of "X." Then, in the optimum, Alf's marginal rate of substitution will be different from Bo's even if they face the same prices.
d.   All Giffen goods are normal goods, but not all normal goods are Giffen goods.
e.   Economists assume that preferences are ordinal. This implies that given two utility functions and one is a monotonic transformation of the other, then they represent the same preferences over bundles of goods.
Textbook 
Microeconomics: Theory and Applications with Calculus

Microeconomics: Theory and Applications with Calculus


Edition: 4th
Author:
Read 32 times
1 Reply
Replies
Answer verified by a subject expert
SaHiN22SaHiN22
wrote...
#1
Posts: 246
Rep: 6 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 410 words.
1

Related Topics

MrsAngelD Author
wrote...

6 years ago
This calls for a celebration Person Raising Both Hands in Celebration
DaiwalkerX
wrote...

Yesterday
This site is awesome
zbmallo3
wrote...

2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1083 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 472
  
 425
  
 330
Your Opinion
How often do you eat-out per week?
Votes: 79
Previous poll results: Which is the best fuel for late night cramming?