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How does the principle of the demolishing marginal utility affect How much people are willing to pay?
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How do you achieve allocative efficiency?
Allocative efficiency is an output level where the price equals the marginal cost of production. This is because the price that consumers are willing to pay is equivalent to the marginal utility that they get. Therefore the optimal distribution is achieved when the marginal utility of the good equals the marginal cost.
What is the difference between marginal rate of substitution and marginal rate of technical substitution?
marginal rate of substitution is the slope of the indifference curve. It is the rate at which the consumer is willing to give up certain units of a good in order to get an additional unit of another good. it is equal to the ration of the Marginal Utilities of the 2 goods. marginal rate of transformation is the slope of the production possibiltiy frontier. it is the rate at which the producer is willing to give up the production of certain units of a good in order to increase the prpduction of the other good by 1 unit ( by shifting the inputs more towards the production of the last good). it is equal to the ratio of the marginal costs of the 2 goods.
Give details that why an Indifference Curve is not concave?
Because of diminishing marginal rate of substitution, which is the principle that the more of one good a consumer has, the more they are willing to give up for an additional unit of the other good. Therefore the indifference curve must get flatter as we go along it
What is declining marginal benefit?
If you were to walk into a restaurant having not eaten all day, you would thus be very hungry. As a result, assuming you had to eat at this restaurant, you would be willing to pay more for a meal than if you had just eaten. Logically, the more full you become, the less you would be willing to pay for a meal. This is an example of declining marginal benefit.
The idea that producers make goods that consumers like and are willing to pay for is a principle of what economic systems?
market
How do you achieve allocative efficiency?
Allocative efficiency is an output level where the price equals the marginal cost of production. This is because the price that consumers are willing to pay is equivalent to the marginal utility that they get. Therefore the optimal distribution is achieved when the marginal utility of the good equals the marginal cost.
What is the difference between marginal rate of substitution and marginal rate of technical substitution?
marginal rate of substitution is the slope of the indifference curve. It is the rate at which the consumer is willing to give up certain units of a good in order to get an additional unit of another good. it is equal to the ration of the Marginal Utilities of the 2 goods. marginal rate of transformation is the slope of the production possibiltiy frontier. it is the rate at which the producer is willing to give up the production of certain units of a good in order to increase the prpduction of the other good by 1 unit ( by shifting the inputs more towards the production of the last good). it is equal to the ratio of the marginal costs of the 2 goods.
Give details that why an Indifference Curve is not concave?
Because of diminishing marginal rate of substitution, which is the principle that the more of one good a consumer has, the more they are willing to give up for an additional unit of the other good. Therefore the indifference curve must get flatter as we go along it
Utility Trailers?
form_title= Utility Trailer form_header= Buy a utility trailer. What will you be hauling?*= _ [50] What is your budget for a utility trailer?*= _ [50] Are you willing to buy used?*= () Yes () No Do you want an open or closed trailer?*= {Open, Closed, Not Sure}
When output is less than the efficient level?
When output is less than the efficient level, the amount consumers are willing to pay equals the cost of production. the cost of production is greater than the price consumers are willing to pay. the marginal cost of producing the good must be greater than the marginal benefit from the good.
What is declining marginal benefit?
If you were to walk into a restaurant having not eaten all day, you would thus be very hungry. As a result, assuming you had to eat at this restaurant, you would be willing to pay more for a meal than if you had just eaten. Logically, the more full you become, the less you would be willing to pay for a meal. This is an example of declining marginal benefit.
What is the difference between marginal benefits and marginal costs?
The term marginal cost refers to the oppurtunity cost associated with producing one more additional unit of a good. Opportunity cost is a critical concept to economics - it refers to the value of the highest value alternative opportunity. For example, in examining the marginal cost of producing one more bushel of wheat, that number could be expressed as the dollar value of corn or other goods that could be produced in lieu of more wheat. Marginal benefit refers to what people are willing to give up in order to obtain one more unit of a good, while marginal cost refers to the value of what is given up in order to produce that additional unit. Additional units of a good should be produced as long as marginal benefit exceeds marginal cost. It would be inefficient to produce goods when the marginal benefit is less than the marginal cost. Therefore an efficient level of product is achieved when marginal benefit is equal to marginal cost.
The idea that producers make goods that consumers like and are willing to pay for is a principle of what economic systems?
market
You want someone to talk to Will anyone answer?
There is always someone that is willing to listen, and respond. Whether it be a family member, a couselor, a friend, the lady at the cash register, your boss, your principle, a pastor or preist. There are many people that will be willing to listen to you and be willing to give you an answer.
What is the assumption of the indifference curve?
There are 4 basic assumptions for indifference curve 1. Analysis is restricted to goods that yield positive marginal utility, or simply, more is better. 2.Marginal rate of substitution, MUx/MUy, or the ratio at which a household is willing to substitute Y for X. As you consume more of X and less of Y, X becomes less valuable in units of Y 3. Consumer have the ability to choose among the combination of goods and services available. 4. Consumer choices are consistent with a simple postulate of rationality. if A consumer prefer A to B and B to C , then when confronted consumer will prefer A to C as well.
In economics what is the diminishing marginal rate of substitution?
The hypothesis that the loss of one commidity that is presently being cosumed by a household.the less willing willthe household be to give up a unit of that commidity to obtain an additional unit of a second commidity.
What happens to the marginal rate of substitution as you move along a convex indifference curve?
The MRS measures how much of a good you are willing to give up in exchange for one more unit of the other good, keeping utility constant. The MRS diminishes along a convex indifference curve in that as you move down along the indifference curve, you are willing to give up less and less of the one good in exchange for the other. The MRS is also the slope of the indifference curve, which increases (becomes less negative) as you move down along the indifference curve. The MRS is constant along a linear indifference curve, since in this case the slope does not change. The consumer is always willing to trade the same number of units of one good in exchange for the other.
