Ch.4 HW - Anthony Marsala Professor Woodbury EC251H Sec. 2...

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Unformatted text preview: Anthony Marsala Professor Woodbury EC251H Sec. 2 Ch.4 Homework Pg. 107 #1, 4, 6, 7, 9, 11, 30, 36 1. We believe indifference curves to be convex because most consumers are only willing to give up a good if they can get significantly more of another by the principle of more is better. This is true on a convex curve because for each unit you give up of one good, you receive more and more of another. However, on a concave curve, there are possible combinations where you are giving up one unit of a good but not receiving additional units of the second good. For example consider a concave curve with points a, b, and c. Moving from bundle c to b requires giving up 1 pizza for 3 burritos while moving from b to a requires giving up 1 pizza for only 2 burritos because as you move up the curve the MRS decreases. 4....
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Ch.4 HW - Anthony Marsala Professor Woodbury EC251H Sec. 2...

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