Problems Involving Indifference Curves

Related BrainMass Solutions

• arc elasticity of demand

  The theory of consumer choice that the indifference curves embody is an elegant construction with which economists frame problems.

• Give separate arguments to support your claims as to their slope, curvature, and the direction of increasing utility

  sometimes called price-indifference curves.

• Budget Constraints - Description

  How does a budget constraint explain consumer choices when used in conjunction with indifference curves? Explain what happens if a household looses half of their income, using a budget constraint and indifference curves in your discussion.

• Indifference Curves and budget lines

  Income =$1000/ month Price of 1 pound of steak = $4.00 Price of 1 pound of potatoes = $0.50 Now, "overlay" several indifference curves onto the picture. Describe the shape of these curves -- why are they that shape.

• Utility Functions

  Problem 3 For each of the following utility functions, draw indifference curves for utility level 12 and 16. Indicate three bundles on each of these indifference curves by specifying the coordinates of each bundle.

• Constructing efficient frontier and optimal portfolio

  Now add a set of indifference curves to the graph created for part b. What do these curves represent? What is the optimal portfolio for this investor?

• Budget Lines/Indifference Curves

  The solution determines the budget lines/indifference curves.

• Indifference Curves, Utility Maximizing Conditions, and Demand Curves

  591321 Indifference Curves, Utility Maximizing Conditions, and Demand Curves 1. Using Indifference Curve and Budget Line analysis, graphically demonstrate the equilibrium of a consumer who is maximizing utility. Briefly explain. 2.

• Using the Demand Curve and the Utility-Maximizung Rule

  The plot of the budget line and the indifference map is provided in the attached document. The indifference curves are shaped as rectangular hyperbolas.