Homework Answers
20. As income increases, consumption of Y increases and X falls.
Y is normal and X is inferior.
C. X is inferior and y is normal.
21. Graph A.
Add Answer to:
1) (2 points) The above graph shows that A) x is normal and y is normal...
23. Consider the above graph for goods x and y. Which of the following could possibiy...
23. Consider the above graph for goods x and y. Which of the following could possibiy describe the above graph? a. b. Income-Consumption graph for substitutes and complements Income-Consumption graph and Price-Consumption substitutes praph for c. Income-Consumption graph and Price-Consumption graplh o complements d. Price-Consumption graph for substitutes and complemens e. None of the above 24. Consider the following graph which illustrates a budget constraint and a utiliny cun The price of good x is 1.5 and the price of...
U 1 3 x 3 y 4 = Suppose the price of x is given by...
U 1 3 x 3 y 4 = Suppose the price of x is given by px and the price of y is given by Py and the budget income of the consumer is given by 1. Price of x, Price of y and Income are always strictly positive. Assume interior solution. a) Write the statement of the problem (1 point) b) Compute the parametric expressions of the equilibrium quantity of x & y purchased and the maximized utility. You...
1) Demand for an inferior good is ___________________. a. Cannot be determined from the information b....
1) Demand for an inferior good is ___________________. a. Cannot be determined from the information b. Upward sloping c. Downward sloping d. Inelastic e. Elastic 2) Considering shoes and socks, to graph an Engel curve of shoes what must be true? a. Utility is held constant b. The price of shoes changes c. The prices of shoes and socks are held constant d. Cannot be determined from the information e. Income is held constant
The demand for good X is given by QXd = 6,000 - (1/2)PX - PY +...
The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. a. Indicate whether goods Y and Z are substitutes or complements for good X. Good Y is: (Click to select) a substitute neither complement nor substitute a complement . Good Z is: (Click to select) a complement a...
From the graph given, a) locate two points on an individual demand curve that you sketch...
From the graph given,
a) locate two points on an individual demand curve that you
sketch directly below the graph presented.
b) what is the point price elasticity of demand at price
3?
c) Is this commodity a normal good, inferior, or Giffin good by
all? Show how you know by additional sketching on the graph (Hint:
by finding substitution effect and income effect you shift the
budget constrain parallel to the right until it attaches to the
higher indifference...
Consider the truthfulness of the following statement. If the income consumption curve is downward sloping, then...
Consider the truthfulness of the following statement. If the income consumption curve is downward sloping, then good y is necessarily an inferior good. If the price consumption curve (as the price of good x changes) is upward sloping, the demand curve for good x is necessarily downward sloping. A. Only statement I is true. B. Only statement II is true. C. Both statements I and II are true. D. Neither statement is true please show your work. thank you.
2. Identifying normal, inferior, and Giffen goods The green line BC, on the following graph represents...
2. Identifying normal, inferior, and Giffen goods The green line BC, on the following graph represents your initial budget constraint for good X and good Y, and point A represents the optimal consumption choice, given this choice set. Suppose the price of good X dropped by 50%. The compensated budget is parallel to BC2, representing the same tradeoff between good X and good Y, and it is tangent to the given indifference curve (U) at point B. On the following...
The graph shows Tom’s budget line and indifference curve for good x and y. The price...
The graph shows Tom’s budget line and indifference curve for good x and y. The price of good x is $40 . If he uses all of his income on good Y , then 20 units of y will be consumed. If all income is spent on good x then 4 units will be consumed. What is the marginal rate of substitution of good y for x at the point where the indifference curve is tangent to the budget line?
7 points. hich of the following will nof cause the demand for product K to cha...
7 points. hich of the following will nof cause the demand for product K to cha A, a change in B. an increase in consumer incomes C, a change in the price of K the price ofclose-substitute product J a change in consumer tastes 2. The law of demand is illustrated by a demand curve that is: A. Vertical B. Horizontal C. Upward sloping Downward sloping 3. An inferior good is one: A. That doesn't work B. That costs too...
3. Ramon has $100 to spend on apples and bananas. The price of apples is $4...
3. Ramon has $100 to spend on apples and bananas. The price of apples is $4 a pound and the price of bananas is $2 a pound. The graph below represents Ramon's budget line with his consumption of apples on the Y-axis and his consumption of bananas on the X-axis. Homework 2: Problem Set 2 Apples (pounds) BL1 Bananas (pounds) (a) On the graph above: Add the intercepts of BL . Assuming that Ramon chooses to purchase 20 pounds of...
23. Consider the above graph for goods x and y. Which of the following could possibiy describe the above graph? a. b. Income-Consumption graph for substitutes and complements Income-Consumption graph and Price-Consumption substitutes praph for c. Income-Consumption graph and Price-Consumption graplh o complements d. Price-Consumption graph for substitutes and complemens e. None of the above 24. Consider the following graph which illustrates a budget constraint and a utiliny cun The price of good x is 1.5 and the price of...
U 1 3 x 3 y 4 = Suppose the price of x is given by px and the price of y is given by Py and the budget income of the consumer is given by 1. Price of x, Price of y and Income are always strictly positive. Assume interior solution. a) Write the statement of the problem (1 point) b) Compute the parametric expressions of the equilibrium quantity of x & y purchased and the maximized utility. You...
From the graph given,
a) locate two points on an individual demand curve that you
sketch directly below the graph presented.
b) what is the point price elasticity of demand at price
3?
c) Is this commodity a normal good, inferior, or Giffin good by
all? Show how you know by additional sketching on the graph (Hint:
by finding substitution effect and income effect you shift the
budget constrain parallel to the right until it attaches to the
higher indifference...
2. Identifying normal, inferior, and Giffen goods The green line BC, on the following graph represents your initial budget constraint for good X and good Y, and point A represents the optimal consumption choice, given this choice set. Suppose the price of good X dropped by 50%. The compensated budget is parallel to BC2, representing the same tradeoff between good X and good Y, and it is tangent to the given indifference curve (U) at point B. On the following...
7 points. hich of the following will nof cause the demand for product K to cha A, a change in B. an increase in consumer incomes C, a change in the price of K the price ofclose-substitute product J a change in consumer tastes 2. The law of demand is illustrated by a demand curve that is: A. Vertical B. Horizontal C. Upward sloping Downward sloping 3. An inferior good is one: A. That doesn't work B. That costs too...
3. Ramon has $100 to spend on apples and bananas. The price of apples is $4 a pound and the price of bananas is $2 a pound. The graph below represents Ramon's budget line with his consumption of apples on the Y-axis and his consumption of bananas on the X-axis. Homework 2: Problem Set 2 Apples (pounds) BL1 Bananas (pounds) (a) On the graph above: Add the intercepts of BL . Assuming that Ramon chooses to purchase 20 pounds of...
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