Micro Part 2

Question 1

Indifference curve :

Answer 1

A curve representing all the combinations of bundles that provide the same utility

Question 2

Substitutes (products )

Answer 2

Indifference curve downward slipping

Wind energy and sun energy

Question 3

Complimentary products

Answer 3

A relation between to two products

Question 4

Cross price elasticity :

Answer 4

A changé in the price of one product affect the demand of the other product.

Question 5

Cross price elasticity I’d substitute goods

Answer 5

Positive

Question 6

Marginal rate of substitution :

Answer 6

-Variation de y / variation de x

—> the consumer is willing to give up x of y to get xx of x

Question 7

MRS

Answer 7

-derive de x/derive de y ?

Question 8

MRS

Answer 8

A relationship if prices : -px/py

Relation obtenu à partir 
1- équation du budget 
2- on charger y grave a 1 
3- ya et yb 
4- la difference des 2 
5- on pose variation y = yb-ya pareil pour x

Question 9

Decreasing marginal utility :

Answer 9

Utility get from consumption decreases with higher quantity consumed

Question 10

Budget Line

Answer 10

Shows combination of goods that can be afforded w current income

Question 11

Consumption optimization :

Answer 11

—> maximization under constraints of budget:

• choose the highest indifference curve is tangential to the budget line

Question 12

Diamond water / paradox :

Answer 12

The utility of water is much larger than that of diamonds

But water supply is abundant, marginal utility of water hence its price is low

And diamond are scare and marginal utility of diamond is Hicham hence is price is High