His preferences satisfy \"more is better\" His preferences fail the transitivity
ID: 1147983 • Letter: H
Question
His preferences satisfy "more is better"
His preferences fail the transitivity assumption
His indifference curves are downward sloping
His preferences are convex
He dislikes good 1
And when Reshad's income is $60 and the prices are given by p1=3 and p2=2. Select all that applies:
When he consumes zero amount of good 1, his MRS is equal to 1.
It is optimal for him to consume 20 units of good 1.
It is optimal for him to consume 30 units of good 2.
If the price of good 1 doubles, he will increase his consumption of good 2.
a.His preferences satisfy "more is better"
b.His preferences fail the transitivity assumption
c.His indifference curves are downward sloping
d.His preferences are convex
e.He dislikes good 1
f. Marginal rate of substitution for his preferences is given by
And when Reshad's income is $60 and the prices are given by p1=3 and p2=2. Select all that applies:
a.Marginal rate of substitution for his preferences is given by
b.When he consumes zero amount of good 1, his MRS is equal to 1.
c.It is optimal for him to consume 20 units of good 1.
d.It is optimal for him to consume 30 units of good 2.
e.If the price of good 1 doubles, he will increase his consumption of good 2.
Explanation / Answer
For the first question,
a is satisfied as more quantity has a higher utility function, c is right as indifference curve is downward sloping,d is right as prefernces are convex, e is right
For the second question.
a is wrong, b is wrong, d is right, e is right, c is wrong
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