Question:

per week is Let say for example, a consumers consumption bundle , composed of 3 units of goodX and 12 units of good y , however, she wanted to increase her consumption in good X and her new prefered consumption bundle consist of qunits of goodx and counts of good ). Using marginal rate of substitution, we could show the following changes in consumer preferences. MRS A Goody 2 A Good X 3 Good y in this grouph MRS= - 3 indicates that she is willing MRS = -3 2 to give up one mnit of good 9 for - unit of good x 1 6 3 10 12 Good x 21. Show how you might formally represent a change in tastes in favor of good X. 2. Show how you might formally represent a set of preferences in which one person is altruistic toward, or envious of, another person. 3. Show that an equal percentage tax on all goods, collecting the same revenue from a consumer as a lump-sum tax, is identical to the lump-sum tax. Reference: Binger, B. R., & Hoffman, E. (1998). Microeconomics with Calculus. Addison-Wesley.2 1 consumer A Consumer B D/preferred preferred bundle C C B 1 3 A A U 2 We could show that Consumer A is altruistic toward Consumer a if consumer A chooses the consumption bundle B while consumer B chooses the consumption bundle C. Remember that the higher tup indifference write, the higher the satisfaction will be. thus, in this scenario, Garner consumer A received a lesser satisfaction than B. we could say that consumer A is alturistic toward consumer B because of the difference in satisfaction received