Question

please help with both questions if possible!

10:40 Done 3 of 9 6 46 The above figure shows Bobby's indifference map for juice and was also show we three budget lines resulting from different prices for sacks assuming he has 5200 Sprendo these goods. Which of the following points are on Bobby's demand curve forwack! A) -2.4-5 B) -2,-10 Cp-2-13 D) -1.-20 9 ) In the relevant price range a demand curve for a Giffon good would be A) dowww sloping B) hatal C) vertical Dupwarding

Answer 1

8.

Answer: A

The equilibrium point of demand is found where indifference curve and budget line intersect.

It happens at (q = 5) point, where the corresponding product J is 10. Therefore, (q × p = 5 × 2 =) $10, and the remaining (20 – 10 =) $10 could be utilized for purchasing the product J. In this way the budget ($20) could be satisfied.

Other options are not correct:

Option B: p × q = 2 × 10 = $20; the corresponding 15 units of J can’t be purchased since the budget is over.

Option C: this (q = 13) in not at equilibrium; therefore should not be considered.

Option D: although the budget is satisfied at (q = 20), since (p × q = 1 × 20 =) $20 and there is no corresponding J, but this point is not in equilibrium; therefore, should not be considered.

9. Answer: upward slopping This is the product category which comes under basic necessities, such as bread, wheat, rice, etc. Its price and quantity has a direct relationship, therefore, the curve becomes upward slopped. Price Demand curve Quantity