Purchase Solution

Indifference Curves, Utility Maximizing Conditions, and Demand Curves

Not what you're looking for?

Ask Custom Question

1. Using Indifference Curve and Budget Line analysis, graphically demonstrate the equilibrium of a consumer who is maximizing utility. Briefly explain.

2. Using Indifference Curve and Budget Line analysis, graphically demonstrate how you can derive a demand curve. Briefly explain.

Note: In the above questions, assume a bundle of two goods X and Y. Put X on the horizontal axis and Y on the vertical axis. Explain, using powerpoint to illustrate.

Purchase this Solution

Solution Summary

This solution shows the utility maximizing conditions, both graphically and algebraically. In addition, this solution also has a step by step description of how to derive Marshallian and Hicksian Demand Curves using Indifference curves. It includes a powerpoint file with diagrams and animations explaining how the diagrams are derived.

Solution Preview

Please see attached file for complete solution.

Some basics:

All points on a given Indifference Curve (IDC) give the consumer the same level of satisfaction.

The higher up we go an IDC map, the higher the utility.

IDCs ...

Purchase this Solution

Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.