Homework Answers
7. a) consumption of coffee will fall.
Since both coffee and bagels cannot be inferior together, coffee is a normal good. A rise in the price of coffee, which is a normal good, will lead to a decrease in the consumption of coffee.
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7. Suppose Lisa spends all her money on coffee and bagels, and a bagel is an...
Suppose that with a budget of $100, Deborah spends $60 on sushi and $40 on bagels...
Suppose that with a budget of $100, Deborah spends $60 on sushi and $40 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel, she spends $50 on sushi and $50 on bagels Instructions: Enter your answers as whole numbers. a. How many pieces of sushi and how many bagels did Deborah consume before the price change? Pieces of sushi Bagels L b. At...
Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels...
Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, the price of bagels falls to $1 per bagel. Instructions: Enter your answers as whole numbers. a. How many pieces of sushi and how many bagels did Deborah consume before the price change? Pieces of sushi Bagels b. At the new prices, how much money would it have cost Deborah...
10.1 Utility Maximization Question Friday, Aprl 21, 3017 03 PM Each week, Jen likes to drink coffee and eat bagels i...
10.1 Utility Maximization Question Friday, Aprl 21, 3017 03 PM Each week, Jen likes to drink coffee and eat bagels in the morning either at work or at home on the weekends. Figure 1 lists the total utility that she receives at each quantity of cups of coffee and bagels, respectively. Additionally, Jen has a weekly budget of $12 to spend on consuming cups of coffee and bagels (and she always spends her whole coffee/bagel budget otherwise she gets grumpy!)....
2.6 Marcia spends her money on coffee and sugar, which she views as perfect complements. She...
2.6 Marcia spends her money on coffee and sugar, which she views as perfect complements. She adds one table- spoon of sugar to each cup of coffee. A cup of cof- fee costs $1. Use graphs to show her compensating variation and equivalent variation if the price of sugar increases. Discuss the relative sizes of the change in her consumer surplus, compensating variation, and equivalent variation.
3. Keiko spends all her money on airtime for her mobile phone and gasoline for her...
3. Keiko spends all her money on airtime for her mobile phone and gasoline for her car. Her preferences correspond to the utility function U(G,W) = W+ 20/G, where G stands for gallons of gasoline and W stands for mobile (wireless) minutes used in a week. (Remember, for that utility function, the marginal utility of gasoline is 10/VG, and the marginal utility of mobile minutes is 1.) Keiko can spend S40 and mobile minutes cost $0.50 per minute. Suppose the...
1. Best Bagels Company makes bagels. The law of demand implies, holding everything else constant, that...
1. Best Bagels Company makes bagels. The law of demand implies, holding everything else constant, that a. as the price of bagels increases, the quantity of bagels demanded will increase. b. as the price of bagels increases, the demand for bagels will increase. c. as the price of bagels increases, the quantity of bagels demanded will decrease. d. as the price of bagels increases, the demand for bagels will decrease! 2. When the price of a normal good falls, ceteris...
10.1 Utility Maximization Question Fday, Ap 313es PM Each week, Jen likes to drink coffee and...
10.1 Utility Maximization Question Fday, Ap 313es PM Each week, Jen likes to drink coffee and eat bagels in the morning either at work or at home on the weekends. Figure 1 lists the total utility that she receives at each quantity of cups of coffee and bagels, respectively. Additionally, Jen has a weekly budget of $12 to spend on consuming cups of coffee and bagels (and she always spends her whole coffee/bagel budget otherwise she gets grumpy!). The current...
(38pts) Suppose a consumer spends all of her income on only two goods, z and y. Her preferences o...
(38pts) Suppose a consumer spends all of her income on only two goods, z and y. Her preferences over these two goods are represented by the utility function u(r,y) min(, 4y). The price of good y is given to be S8. Her income and price of z are represented by m and ps, respectively. (a) (10 pts) Find the demand for good z as a function of m and pa. (b) (5 pts) Is good z ordinary or Giffen good?...
economics Problem 2 Jon is spending his money on potatoes (R) and all other goods (C)....
economics
Problem 2 Jon is spending his money on potatoes (R) and all other goods (C). Suppose that the price of rice potatoes falls. Determine Jon's optimal consumption bundle using the tangency between his original budget line and one of his indifference curves as well as the consumption bundle after the price change, i.e., using the tangency between his new budget line and one of his indifference curves when 1. Potatoes is a normal good 2. Potatoes is an inferior...
The classical dichotomy and the neutrality of money: Mary spends all her money on paperback novels...
The classical dichotomy and the neutrality of money: Mary spends all her money on paperback novels and donuts. In 2014, she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a donut was $1.00 Which of the following give the nominal value of a variable? Check all that apply. A. The price of a donut is $1.00 in 2014 B. The price of a donut is 0.14 paperback novels in 2014 C. Mary's...
Suppose that with a budget of $100, Deborah spends $60 on sushi and $40 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel, she spends $50 on sushi and $50 on bagels Instructions: Enter your answers as whole numbers. a. How many pieces of sushi and how many bagels did Deborah consume before the price change? Pieces of sushi Bagels L b. At...
Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, the price of bagels falls to $1 per bagel. Instructions: Enter your answers as whole numbers. a. How many pieces of sushi and how many bagels did Deborah consume before the price change? Pieces of sushi Bagels b. At the new prices, how much money would it have cost Deborah...
10.1 Utility Maximization Question Friday, Aprl 21, 3017 03 PM Each week, Jen likes to drink coffee and eat bagels in the morning either at work or at home on the weekends. Figure 1 lists the total utility that she receives at each quantity of cups of coffee and bagels, respectively. Additionally, Jen has a weekly budget of $12 to spend on consuming cups of coffee and bagels (and she always spends her whole coffee/bagel budget otherwise she gets grumpy!)....
2.6 Marcia spends her money on coffee and sugar, which she views as perfect complements. She adds one table- spoon of sugar to each cup of coffee. A cup of cof- fee costs $1. Use graphs to show her compensating variation and equivalent variation if the price of sugar increases. Discuss the relative sizes of the change in her consumer surplus, compensating variation, and equivalent variation.
3. Keiko spends all her money on airtime for her mobile phone and gasoline for her car. Her preferences correspond to the utility function U(G,W) = W+ 20/G, where G stands for gallons of gasoline and W stands for mobile (wireless) minutes used in a week. (Remember, for that utility function, the marginal utility of gasoline is 10/VG, and the marginal utility of mobile minutes is 1.) Keiko can spend S40 and mobile minutes cost $0.50 per minute. Suppose the...
1. Best Bagels Company makes bagels. The law of demand implies, holding everything else constant, that a. as the price of bagels increases, the quantity of bagels demanded will increase. b. as the price of bagels increases, the demand for bagels will increase. c. as the price of bagels increases, the quantity of bagels demanded will decrease. d. as the price of bagels increases, the demand for bagels will decrease! 2. When the price of a normal good falls, ceteris...
10.1 Utility Maximization Question Fday, Ap 313es PM Each week, Jen likes to drink coffee and eat bagels in the morning either at work or at home on the weekends. Figure 1 lists the total utility that she receives at each quantity of cups of coffee and bagels, respectively. Additionally, Jen has a weekly budget of $12 to spend on consuming cups of coffee and bagels (and she always spends her whole coffee/bagel budget otherwise she gets grumpy!). The current...
(38pts) Suppose a consumer spends all of her income on only two goods, z and y. Her preferences over these two goods are represented by the utility function u(r,y) min(, 4y). The price of good y is given to be S8. Her income and price of z are represented by m and ps, respectively. (a) (10 pts) Find the demand for good z as a function of m and pa. (b) (5 pts) Is good z ordinary or Giffen good?...
economics
Problem 2 Jon is spending his money on potatoes (R) and all other goods (C). Suppose that the price of rice potatoes falls. Determine Jon's optimal consumption bundle using the tangency between his original budget line and one of his indifference curves as well as the consumption bundle after the price change, i.e., using the tangency between his new budget line and one of his indifference curves when 1. Potatoes is a normal good 2. Potatoes is an inferior...
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