This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Why does your marginal rate of substitution between chocolate and vanilla ice cream decline ... (Read 181 times)

B

  • Hero Member
  • *****
  • Posts: 570
on: Jun 29, 2018
Why does your marginal rate of substitution between chocolate and vanilla ice cream decline continuously as you move rightward on your indifference curve between the two?
 
  What will be an ideal response?

Question 2

Referring to Situation 1 suppose that you can now hire two workers. What is the opportunity cost of the second executive's work from the viewpoint of the company? Explain.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

kbennett34

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jun 29, 2018
Answer to Question 1

With chocolate on the vertical axis and vanilla on the horizontal, as you move rightward along your indifference curve, the more chocolate you give up and the less you have remaining. As a result, you grow to value your chocolate more and more and your vanilla less and less. You therefore become willing to give up less chocolate to get more vanilla.

Answer to Question 2

The second executive's work is simply the value of the next best opportunity which is the work that could have been done by the third executive which is 500,000


B

  • Member
  • Posts: 570
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

abro1885

  • Member
  • Posts: 337
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

There are immediate benefits of chiropractic adjustments that are visible via magnetic resonance imaging (MRI). It shows that spinal manipulation therapy is effective in decreasing pain and increasing the gaps between the vertebrae, reducing pressure that leads to pain.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

The rate of evolution in short­ and long­lived plants The rate of evolution in short­ and long­lived plants
THE RATE OF PHOTOSYNTHESIS THE RATE OF PHOTOSYNTHESIS
Chocolate Blog Title Chocolate Blog Title
How an Increase in Income Inequality Affects the Desired Tax Rate How an Increase in Income Inequality Affects the Desired Tax Rate
Explain the myogenic autoregulation of the glomerular filtration rate Explain the myogenic autoregulation of the glomerular filtration rate
The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho
Video: baroreceptors

For a complete list of videos, visit our video library