« previous next »

Author Question: Joe's indifference map for lobster and soda is shown in the above figure along with his budget line. ... (Read 211 times)

nmorano1

  • Hero Member
  • *****
  • Posts: 598
on: Jul 1, 2018
Joe's indifference map for lobster and soda is shown in the above figure along with his budget line. Will Joe choose point a? Explain your answer in terms both of MRS and the level of utility.
 
  What will be an ideal response?

Question 2

Consider a world with two income earners and an income tax. Individual A earns 25,000 and pays 1,000 in taxes. Individual B earns 100,000 and pays 4,000 in taxes. Which of the following best classifies the income tax system in this world?
 
  a. proportional
  b. progressive
  c. regressive
   d. sumptuary
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


gabrielle_lawrence

  • Sr. Member
  • ****
  • Posts: 353
Reply #1 on: Jul 1, 2018
Answer to Question 1

Joe will not choose point a. Since the slope of his budget line tells us that he must give up only 9 sodas to get a lobster, Joe will wish to buy more lobsters and less soda than bundle a provides. From a utility standpoint, Joe will not choose point a because another bundle that lies on a higher indifference curve is obtainable.

Answer to Question 2

a


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

Always store hazardous household chemicals in their original containers out of reach of children. These include bleach, paint, strippers and products containing turpentine, garden chemicals, oven cleaners, fondue fuels, nail polish, and nail polish remover.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Drug development time line. Drug development time line.
Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ... Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ...
The 2-deoxyglucose technique. The accumulation of radioactivity is shown in three frontal sections ... The 2-deoxyglucose technique. The accumulation of radioactivity is shown in three frontal sections ...
A ship is being pulled through a harbor at constant velocity by two tugboats as shown in the ... A ship is being pulled through a harbor at constant velocity by two tugboats as shown in the ...
For toluene (shown below), you would expect to see which m/z fragment in the mass spectrum? For toluene (shown below), you would expect to see which m/z fragment in the mass spectrum?
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Video: Introduction to Insulin

For a complete list of videos, visit our video library