homework # 2

homework # 2 - 4c. iv 5. The first graph shows that the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Dr. Popp AGEC 1103 5 February 2007 Homework #2 1. The marginal utility curve is negative because even though the total utility is increasing with each additional wing, it is decreasing at the rate rising. 2a. She will choose 12 cokes and 3 wings because of its higher utility. 2b. Robbin would choose D, 12 cokes and 6 wings because it lies on a higher utility curve. 2c. -6/6= -1 3e. Robbin does not care what combination of goods she buys because they all lie on the same utility curve therefore they all offer the same satisfaction. 4a. -5/4 4b.She is willing to give up 5 tacos in order to gain 4 hamburgers.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 4c. iv 5. The first graph shows that the price of hamburgers increased and the price of tacos stayed the same, or income decreased. The second graph shows that the budget decreased or, the price of both tacos and hamburgers increased. The third graph shows that the price of hamburgers stayed the same while the price of tacos decreased. 6a. Engel’s curve 6b. We are willing to give up 3 cheap food units or every 1 environmental quality unit. 7c. 25 video games and 0 movies or 0 video games and 10 movies...
View Full Document

This note was uploaded on 04/27/2008 for the course AGEC 1103 taught by Professor Popp during the Spring '08 term at Arkansas.

Ask a homework question - tutors are online