Violate one of the assumptions underlying utility theory

Assignment Help Business Economics
Reference no: EM131244448

State whether the following is true or false. Explain your answers.

a. Daniel consumes food and newspapers. Given that these are the only two goods he consumes, it is possible for both food and newspapers to be inferior goods for Daniel.

b. Sister Prudence, a nun in the Dominican order (a Catholic religious order), has taken a vow of poverty. Her preferences must therefore violate one of the assumptions underlying utility theory.

c. If all prices and all income increases by 10%, it should not affect the optimal choice or wellbeing of the consumer. Because of that, inflation is not important.

Reference no: EM131244448

Questions Cloud

Is the relation between wal-mart and its consumers : Is the relation between "Wal-Mart" and its consumers, workers, and communities typical or atypical of the relation between businesses and consumers, workers, and communities? Explain.
Result in a larger drop in prices for restaurant meals : Many new restaurants have opened in Collegetown in recent years. Given this change in supply, what type of demand would result in a larger drop in prices for restaurant meals?
What is the most you can purchase of cereal : Assume that you have a budget of $30 to spend on milk and cereal only. The price of milk is PM = $5 and the price of cereal is PC = $3.50. What is the most you can purchase of cereal? What is the slope of the budget constraint?
Disagreeing due to differences in scientific judgment : Which of the following statements is an example from the video of economists disagreeing due to differences in scientific judgment? President Obama chose Bernanke for another term even after he was chosen by Republican President George Bush.
Violate one of the assumptions underlying utility theory : Daniel consumes food and newspapers. Given that these are the only two goods he consumes, it is possible for both food and newspapers to be inferior goods for Daniel. Sister Prudence, a nun in the Dominican order (a Catholic religious order), has tak..
Demand curve or movement along demand curve : Sort the following scenarios according to whether they would cause a shift in the demand curve or movement along a demand curve.
The same effect on factor income distribution : It has been argued that the effect of trade in goods and services has the same effect on factor income distribution in a country as would be the case if factors were completely mobile internationally. What is the reasoning behind this argument?
Created the context for widespread revolutionary upheaval : Discuss the ways in which the First World War, or the Great War, created the context for widespread revolutionary upheaval during and after the conflict. What was it about the war that led so many people around the world to rebel against their govern..
What stages or areas of global production-value chain : Fortune magazine conducts an annual survey and publishes the rankings of the World's Most Admired Companies. Locate the most recent publicly available ranking, follow the link to the best companies, and focus on the nine factors highlighted by Fortun..

Reviews

Write a Review

 

Business Economics Questions & Answers

  What is expected future wealth

Suppose John now has W = $4900 and foresees that there is 50% chance encountering a big loss of $4800 in the future. Assuming that John's preference can be described by the utility: U ( W ) = sqrootW. What is John's expected future wealth? What is Jo..

  What effective annual interest-financing arrangement

If you purchase a $25,000 car, which is to be paid for in 60 monthly installments of $489.15, what effective annual interest are you paying for this financing arrangement?

  The chamber of commerce luncheon

The guest speaker sat down to a warm round of applause. Jim Hoffman was a well-known local consultant with a seemingly unlimited repertoire of humorous stories and anecdotes. And his subject, “The Dangers of New Product Introductions” always went dow..

  Aggregate demand consider hypothetical economy

Fiscal policy, the money market, and aggregate demand Consider a hypothetical economy in which households spend $0.50 of each additional dollar they earn and save the remaining $0.50. Use the purple line (diamond symbol) on the graph at the beginning..

  Elucidate what could be done to encourage people to spend

Elucidate what could be done to encourage people to spend more so as to increase aggregate demand and invariably, create employment possibilities.

  If price controls are initiated

If price controls are initiated, we would expect that

  Discuss the trade-off of richness and reach in environment

Evan and Wurster discuss the trade-off of “richness and reach” in the environment of decreasing costs of information technology and information. How does this trade-off affect business strategies? Please present an example of a transformed business.

  Benefit of oil spill prevention program include avoided cost

The benefits of an oil spill prevention program include avoided costs, fewer disruptions to normal shipping operations, etc. Cleanup time is consuming an expensive. A typical 1000 oil spill might cost $600000 to clean up or $300000 to prevent in the ..

  Does project indicate it will make at least the marr.

annual profits which estimate to be 85 million per yr for a 20 yr period. at a corporate MARR of 10% per year, Does project indicate it will make at least the MARR.

  Real exchange rate approach to exchange rate determination

The real exchange rate approach to exchange rate determination is based on: q$/€ = R$/€ × PEU PUS or R$/€ = q$/€ × PUS PEU a) Given PUS = 115, PEU = 105, and R$/€ = $1.35 per euro, compute the real exchange rate. write an equation to show a formula f..

  Expected rate of profit is greater than the interest rate

The primary reason women tend to be paid less than men on average is: The expected rate of profit is greater than the interest rate.

  No major labor union has called strike

Today more workers in the US are members of lavor unions than any time in our history. Today labor unions are weaker than anytime in the last 100 years. No major labor union has called a strike since the 1940s.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd