posted by .

I need help with question, we havent covered this topic yet and i wanted to push ahead. Thanks.

'Consumers maximise utility subject to a budget constraint. Firms maximise output
subject to a cost constraint'.
Outline how the analysis of the firm's behaviour in terms of isoquant and isocost analysis
parallels the analysis of consumer behaviour in terms of indifference curve and budget
constraint analysis.
To what extent does this type of analysis indicate the meaning of the basic economic

Whew, one could write a thesis on just your question.

To answer, start with certain fundamental precepts. 1) consumers what to maximize their utility, 2) Producers want to maximize economic profits, 3) the basic economic problem is a study of how scarce resources are allocated.

Be sure you understand what an isoquant curve is and represents.

Repost if you have a specific question, or would like a critique of your response.

What does isoquant/isocost & indifference curve and budget constraint analysis have in common? I know that they both 'look' similar & both strive to find the same things "consumers want utility" & "producers want eco profits" (maximising both).

What other things do they have in common? I'm kind of flat out.
Thank you.

What exactly are the roles of price in a market economy?

Is it measure of value, store of value, currency for exchange, price determines quantity demanded?

What else should I add to this list? Any ideas?
Kind regards,
Sir Donsball.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics(micro)

    hey, could someone please give me some tips for the following questions. iv got a test coming up, and one of these 4 questions will be in it..... so i have to write 4 essays n learn it. i just need a few points to put my essay together. …
  2. Economics

    Hi guys I need a hand please!! Whatever you can share would be helpful!! Thank you so much! Here is the question below: ‘Consumers maximize utility subject to a budget constraint. Firms maximize output subject to a cost constraint’. …
  3. Microeconomics

    1. The utility function is given by: U=x+y and the budget line is x+2y=100. Then the price of good x goes up to 4. Find the Hicksian substitution effect, income effect, and total change in demand for good x from the change --- Ok i …
  4. Budget constraint

    X=view of the sea Y=wine Price of X: Px=0 Price of Y: Py=5 Income=10 Assume that a person does not look at the view beyond the point that bores him (when the marginal utility is negative) a) Sketch the budget constraint I know the …
  5. Microeconomics

    Given the utility function U(C,T) = 3C+2T A budget constraint of $50, C = coffee which is $2 a cup, and T = tea which is $1.25 a cup, what is the optimal consumption bundle, and maximum utility possible?
  6. DDP

    what are the different types of geometric constraint that are appiled to sketches and what are their functions?
  7. economics-Budget Constraint & Utility

    Sally is a frequent flyer whose fares are reduced through coupon offerings. She receives a 20% reduction on fares after she flies 20,000 miles, and 40% reduction after she flies 40,000 miles. a) Illustrate her budget constraint. b) …
  8. Economics

    Here goes... 1. Consider a model in which an individual lives two periods: this period (time one) and next period (time two). This period his budget constraint requires that his consumption, c1; plus his saving, s; equals his income, …
  9. cal

    Using a Lagrange Multiplier with One Constraint. Find the maximum value of f(x,y)=4xy, where x>0 and y>0, subject to the constraint (x^(2)/3^(2)+(y^(2)/4^(2)=1.
  10. microeconomics

    Budget constraint 1 is faced when price food = 10 and price clothing = 5. Budget constraint 2 is faced when pfood = 40/7 and pclothing = 10. The income is 100 for both budget constraints. Draw both budget constraints. Next, draw the …

More Similar Questions