Using a diagram show that if the consumer prefers more to less, then indifference curves cannot cross.
Answer to relevant QuestionsIn this chapter, we showed an example in which the consumer has preferences for consumption with the perfect complements property. Suppose, alternatively, that leisure and consumption goods are perfect substitutes. In this ...Suppose that a consumer can earn a higher wage rate for working overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w1, and for hours worked more than q he or she receives w2, ...In the course of producing its output, a firm causes pollution. The government passes a law that requires the firm to stop polluting, and the firm discovers that it can prevent the pollution by hiring x workers for every ...Suppose that the representative consumer's preferences change, in that his or her marginal rate of substitution of leisure for consumption increases for any quantities of consumption and leisure.(a) Explain what this change ...Suppose that there is technological change that reduces the cost of recruiting for firms. Using the DMP model, determine the effects on the unemployment rate, the vacancy rate, the labor force, the number of firms, aggregate ...
Post your question