« previous next »

Author Question: Joe's indifference map for lobster and soda is shown in the above figure along with his budget line. ... (Read 171 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?

Medication errors are three times higher among children and infants than with adults.

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Sildenafil (Viagra®) has two actions that may be of consequence in patients with heart disease. It can lower the blood pressure, and it can interact with nitrates. It should never be used in patients who are taking nitrates.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

One danger of a wire fence is that, as shown in this photo, it is practically invisible; a running a One danger of a wire fence is that, as shown in this photo, it is practically invisible; a running a
Cranial nerves and their target regions. (Sensory nerves are shown in blue; motor nerves, in red.) Cranial nerves and their target regions. (Sensory nerves are shown in blue; motor nerves, in red.)
Beau’s line Beau’s line
Figure and Ground Figure and Ground
Identify the junction nodes in the circuit shown in Figure 21-1. Identify the junction nodes in the circuit shown in Figure 21-1.
Offset Method Plot of Land with Length Line Offset Method Plot of Land with Length Line
Video: Primary Active Transport - electrochemical gradient and ion transport / water movement

For a complete list of videos, visit our video library