Question8 please help
Give reason also
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A consumer always choose more of a commodity. This is monotonic preference.
Thus
1. Its false because consumer will choose 7,5 because it will give him more of commodity.
2. MRS decreases as we move along IC. It is because a consumer will sacrifice less of Y to gain more of a commodity X as his satisfaction from X will keep on decreasing because of law Of DMU.
3. TU will decrease only when MU goes negative.
4. TU will decrease if MU goes negative. Hence it will not be same in case of positive or negative MU.
5. An economy can operate on both PPC AND INSIDE PPC. But it can never operate outside PPC.
6. If the slope of demand curve is Zero, then it's price elasticity will be infinity not zero.
Thus
1. Its false because consumer will choose 7,5 because it will give him more of commodity.
2. MRS decreases as we move along IC. It is because a consumer will sacrifice less of Y to gain more of a commodity X as his satisfaction from X will keep on decreasing because of law Of DMU.
3. TU will decrease only when MU goes negative.
4. TU will decrease if MU goes negative. Hence it will not be same in case of positive or negative MU.
5. An economy can operate on both PPC AND INSIDE PPC. But it can never operate outside PPC.
6. If the slope of demand curve is Zero, then it's price elasticity will be infinity not zero.
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