Homework Answers
When budget line shifts inwards it means consumer income had decreased and will be able to afford less number of goods and services.
Correct option is C. Jeremy will have less money to spend on both goods.
Option b and d are incorrect because It will increase demand and in the question budget line is shifting inwards.
As shift is parallel, it means consumption for both goods decreases equally in same proportion. Hence option a is incorrect.
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Question 1 (1 point) If Jeremy's budget line shifts inward in a parallel manner, what may...
(a) Write down Jeremy's budget constraint (a formula) and plot all Jeremy's affordable bundles in the...
(a) Write down Jeremy's budget constraint (a formula) and plot all Jeremy's affordable bundles in the graph (his budget set). Find the slope of the budget line (number). Give an economic interpretation for the slope of the budget line (one sentence) (b) Jeremy's utility function is given by U(zi,T2) = V(inx1 +1nT2)2 + 7. Propose a simpler utility function that represents the same preferences (give a formula). Explain why your utility represents the same preferences (one sentence) (c) Plot Jeremy's...
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the...
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the consumer's ability to trade goods X and Y. 4. (6 Points) For each description of a change in the budget line given below, state which of the following increases or decreases for the budget constraint variables would cause it: † Px + PxPy. Pytw, and I W. (a) The budget line rotates inward around its horizontal intercept (meaning that it's horizontal intercept does NOT...
Question 1 2 pts Utility is a hypothetical measure of satisfaction one receives from consuming a...
Question 1 2 pts Utility is a hypothetical measure of satisfaction one receives from consuming a good/service. True False Question 2 2 pts The graph below shows a budget line for someone purchasing cupcakes and tutoring. cupcakes (number of) tutoring (hours) What could cause the inward pivot? income increases income decreases the price of cupcakes increases the price of tutoring increases Question 3 2 pts What would cause the budget line to shift inward in a parallel manner? income increases...
A leftward shift of a consumer's budget line to a position parallel with the original one...
A leftward shift of a consumer's budget line to a position parallel with the original one could indicate that the Multiple Choice price of one product has decreased in relation to the other. prices of both products have decreased in the same proportion. consumer's money income has increased and the prices of both products have also increased but proportionately less consumer's money income has increased but the prices of both products have increased proportionately more. Prev 18 of 40 Next>
1. Explain how a consumer's income and the prices of goods limit consumption possibilities. A change in...
1. Explain how a consumer's income and the prices of goods limit consumption possibilities. A change in the prices of goods ______ and a change in a consumer's income ______. A. has no effect on the budget line; changes the slope of the budget line B. shifts the budget line; has no effect on the budget line C. shifts the budget line; changes the slope of the budget line D. changes the slope of the budget line; shifts the budget line 2. Everything else remaining the same, consumption possibilities...
Question 2 (1 point) A decrease in supply shifts the supply curve to the left. True...
Question 2 (1 point) A decrease in supply shifts the supply curve to the left. True False Question 4 (1 point) The equilibrium price is the same as the market-clearing price. True False Question 5 (1 point) When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied. True False Question 6 (1 point) Which of the following events must cause equilibrium price to fall? a) demand increases and supply decreases b)...
5. Suppose you have drawn a consumer's budget line for food and clothing, with food on...
5. Suppose you have drawn a consumer's budget line for food and clothing, with food on the x- axis. Which of the following events would make the budget line steeper? a) Income increases. b) Price of food increases. c) Price of clothing increases. d) None of the above. 6. A downward sloping price-consumption curve indicates that a) The two goods are complements. b) The two goods are substitutes. c) The two goods are independent of each other. d) The two...
MICROECONOMICS Please help me fill these out: QUESTION 4 A budget line 1. will tangent to...
MICROECONOMICS
Please help me fill these out:
QUESTION 4 A budget line 1. will tangent to indifference curve at the optimal choice of good. 2. rotates when the price of goods change. 3. has a slope equal to a relative price. 4.rotates or shifts when the consumer's budget changes. 5. shows the limits to what can be consumed. QUESTION 2 If the price of a good starts out above the equilibrium price, then A. consumers will compete to bid the...
1.Use the table below to answer the following question. Assume that the price of product A...
1.Use the table below to answer the following question. Assume that the price of product A is $4.47 while the price for product B is $5.79. The buyer has a budget of $50. Q MUA MUB 1 22 25 2 21 24 3 20 23 4 19 22 5 18 21 6 17 20 7 16 19 8 15 18 9 14 17 10 13 16 Given the marginal utilities The optimal bundle is ____. A. 6 of product A...
1. answer it only numerical values. 2. A person has a Cobb Douglas utility function for...
1.
answer it only numerical values.
2.
A person has a Cobb Douglas utility function for two goods X and
Y. If the price of a X increases and the budget stays the same, the
utility maximizing person __________.
Cannot be determined from the information
will consume less of Y
will only consume Y
will consume less of both goods
will have lower utility
Sara has $40 in her budget. Given the following graph, what is the MRS of her...
(a) Write down Jeremy's budget constraint (a formula) and plot all Jeremy's affordable bundles in the graph (his budget set). Find the slope of the budget line (number). Give an economic interpretation for the slope of the budget line (one sentence) (b) Jeremy's utility function is given by U(zi,T2) = V(inx1 +1nT2)2 + 7. Propose a simpler utility function that represents the same preferences (give a formula). Explain why your utility represents the same preferences (one sentence) (c) Plot Jeremy's...
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the consumer's ability to trade goods X and Y. 4. (6 Points) For each description of a change in the budget line given below, state which of the following increases or decreases for the budget constraint variables would cause it: † Px + PxPy. Pytw, and I W. (a) The budget line rotates inward around its horizontal intercept (meaning that it's horizontal intercept does NOT...
Question 1 2 pts Utility is a hypothetical measure of satisfaction one receives from consuming a good/service. True False Question 2 2 pts The graph below shows a budget line for someone purchasing cupcakes and tutoring. cupcakes (number of) tutoring (hours) What could cause the inward pivot? income increases income decreases the price of cupcakes increases the price of tutoring increases Question 3 2 pts What would cause the budget line to shift inward in a parallel manner? income increases...
A leftward shift of a consumer's budget line to a position parallel with the original one could indicate that the Multiple Choice price of one product has decreased in relation to the other. prices of both products have decreased in the same proportion. consumer's money income has increased and the prices of both products have also increased but proportionately less consumer's money income has increased but the prices of both products have increased proportionately more. Prev 18 of 40 Next>
Question 2 (1 point) A decrease in supply shifts the supply curve to the left. True False Question 4 (1 point) The equilibrium price is the same as the market-clearing price. True False Question 5 (1 point) When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied. True False Question 6 (1 point) Which of the following events must cause equilibrium price to fall? a) demand increases and supply decreases b)...
5. Suppose you have drawn a consumer's budget line for food and clothing, with food on the x- axis. Which of the following events would make the budget line steeper? a) Income increases. b) Price of food increases. c) Price of clothing increases. d) None of the above. 6. A downward sloping price-consumption curve indicates that a) The two goods are complements. b) The two goods are substitutes. c) The two goods are independent of each other. d) The two...
MICROECONOMICS
Please help me fill these out:
QUESTION 4 A budget line 1. will tangent to indifference curve at the optimal choice of good. 2. rotates when the price of goods change. 3. has a slope equal to a relative price. 4.rotates or shifts when the consumer's budget changes. 5. shows the limits to what can be consumed. QUESTION 2 If the price of a good starts out above the equilibrium price, then A. consumers will compete to bid the...
1.
answer it only numerical values.
2.
A person has a Cobb Douglas utility function for two goods X and
Y. If the price of a X increases and the budget stays the same, the
utility maximizing person __________.
Cannot be determined from the information
will consume less of Y
will only consume Y
will consume less of both goods
will have lower utility
Sara has $40 in her budget. Given the following graph, what is the MRS of her...
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