Homework Answers
Answer-14 correct option is buy more of the cheaper good and less of the more expensive .
Substitution effect suggest this that consumer should buy more of the cheaper good and substitute it with expensive good.
Answer-15 As consumer consume more of a good , we expect marginal utility to decrease.
This holds because of law of diminishing marginal utility.
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Question 14 (1 point) If the price of good x changes relative to good y, the...
1 point What effect occurs when the price of a good falls relative to other goods...
1 point What effect occurs when the price of a good falls relative to other goods and the consumer consequently buys more of this good? the net effect the complement effect O the substitution effect the income effect Which statement best describes diminishing marginal utility? 1 point O Hank is not as happy when he has to share his pizza with other people. O Hank enjoyed his second slice of pizza more than his third slice. O Hank enjoys pizza...
20. Goods X and Y are perfect complements. If the price of good Y falls, what...
20. Goods X and Y are perfect complements. If the price of good Y falls, what will be the consequences on the substitution effect? (1) It will not affect the amount of goods X and Y that consumers buy. (2) It will cause consumers to buy more of good X and less of good Y. (3) It will cause consumers to buy more of good Y and less of good X. (4) It will affect the amount of goods X...
If the price of good X is $4, the price of good Y is $2, and...
If the price of good X is $4, the price of good Y is $2, and the marginal rate of substitution is currently 4, how could consumer increase their utility without decreasing their total expenditure? a) Purchase more Y and less X b) Purchase more X and less Y c) Do nothing; cannot improve utility while keeping spending the same d) Purchase more of X and Y
Suppose that goods X and Y are substitutes and the price of good Y falls. We...
Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect the quantity of good Y demanded to increase and the demand for good X to increase also. an increase in the demand for good X and a decrease in the quantity of good Y demanded. an increase in the demand for both good X and good Y. an increase in the quantity demanded of good Y and a decrease in the...
Question 43 Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are...
Question 43 Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied. Furthermore, assume that both X and Y are inferior goods and the price of good Y increases. Then the substitution effect will lead consumers to consume: more of good X and more of good Y. less of good X and more of good Y. less of good X and less of good Y. more of good X and less of good Y.
36) What would happen in the red apple market if the price of golden apples decreases?...
36) What would happen in the red apple market if the price of golden apples decreases? 36) A) The demand for red apples would increase B) The quantity demanded of red apples would increase C) The demand for red apples would fall. D) Nothing, they are separate and unrelated commodities. 37) Market demand shows: 37) A) the quantity of a good that one seller will sell at a given price B) the quantity of a good that one buyer will...
1) Dave consumes two normal goods, X and Y, and is currently at an optimum....
1) Dave consumes two normal goods, X and Y, and is currently at an optimum. If the price of good X falls, we can predict with certainty that a. the substitution effect will be positive for good X and negative for good Y. b. Dave will consume more of both goods because his real income has risen. c. Dave may consume more or less of good X, but he will...
Need answer for both 3 questions Question 14 (1 point) Suppose that over the past decade,...
Need answer for both 3 questions
Question 14 (1 point) Suppose that over the past decade, U.S. inflation is greater than that in Japan. Further assume that during this same period, the U.S. dollar appreciates relative to the Japanese yen, Given this information, and assuming Japan as the domestic economy, 1) the real exchange rate remains unchanged. 2) the real exchange rate must increase. 3) the real exchange rate can decrease or remain the same, but not increase. 4) the...
Cole is about to purchase 4 units of good A and 6 units of good B....
Cole is about to purchase 4 units of good A and 6 units of good B. The price of A is $3 and the price of B is $2. Cole has only $24 to spend. Assume that the marginal utility of the fourth unit of A is 18 and the marginal utility of the sixth unit of B is 6. If Cole wants to maximize utility he should buy less of B and more of A. Cole cannot maximize utility...
Suppose the price of Good X is $4 and the price of Good Y is $3....
Suppose the price of Good X is $4 and the price of Good Y is $3. If a consumer has a Marginal Rate of Substitution (MRSxy) of 2 for the bundle they are considering, then given their budget constraint, the consumer... Select one O a. Cannot reach a higher level of utility given their budget constraint. Ob. Would have a higher utility if they bought more of Good X. c. Would have a higher utility if they bought less of...
1 point What effect occurs when the price of a good falls relative to other goods and the consumer consequently buys more of this good? the net effect the complement effect O the substitution effect the income effect Which statement best describes diminishing marginal utility? 1 point O Hank is not as happy when he has to share his pizza with other people. O Hank enjoyed his second slice of pizza more than his third slice. O Hank enjoys pizza...
20. Goods X and Y are perfect complements. If the price of good Y falls, what will be the consequences on the substitution effect? (1) It will not affect the amount of goods X and Y that consumers buy. (2) It will cause consumers to buy more of good X and less of good Y. (3) It will cause consumers to buy more of good Y and less of good X. (4) It will affect the amount of goods X...
36) What would happen in the red apple market if the price of golden apples decreases? 36) A) The demand for red apples would increase B) The quantity demanded of red apples would increase C) The demand for red apples would fall. D) Nothing, they are separate and unrelated commodities. 37) Market demand shows: 37) A) the quantity of a good that one seller will sell at a given price B) the quantity of a good that one buyer will...
Need answer for both 3 questions
Question 14 (1 point) Suppose that over the past decade, U.S. inflation is greater than that in Japan. Further assume that during this same period, the U.S. dollar appreciates relative to the Japanese yen, Given this information, and assuming Japan as the domestic economy, 1) the real exchange rate remains unchanged. 2) the real exchange rate must increase. 3) the real exchange rate can decrease or remain the same, but not increase. 4) the...
Cole is about to purchase 4 units of good A and 6 units of good B. The price of A is $3 and the price of B is $2. Cole has only $24 to spend. Assume that the marginal utility of the fourth unit of A is 18 and the marginal utility of the sixth unit of B is 6. If Cole wants to maximize utility he should buy less of B and more of A. Cole cannot maximize utility...
Suppose the price of Good X is $4 and the price of Good Y is $3. If a consumer has a Marginal Rate of Substitution (MRSxy) of 2 for the bundle they are considering, then given their budget constraint, the consumer... Select one O a. Cannot reach a higher level of utility given their budget constraint. Ob. Would have a higher utility if they bought more of Good X. c. Would have a higher utility if they bought less of...
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