Homework Answers
Here option D is correct .
A consumer spends all of her income on pizzas and movies so if the price of movies decreases, the consumer's opportunity set will …
Become larger.
Because there is an inverse relationship between opportunity cost and prices of the commodities.
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A consumer spends all of her income on pizzas and movies. If the price of movies...
A consumer spends all of her income (Y) on two goods Z and B. The price...
A consumer spends all of her income (Y) on two goods Z and B. The price of good B (PB) is $6. The Marginal Rate of Transformation MRT is equal to minus2. That is 2 units of good B can be traded for 1 unit of good Z. This consumer is able to buy 15 units of good Z and 0 units of good B with his/her income. What is this consumer's level of income? The consumer's income is $...
Use the following information to answer questions 298 30. Assume a consumer purchases 5 pizzas and...
Use the following information to answer questions 298 30. Assume a consumer purchases 5 pizzas and 4 sodas. The price of pizza is $6 and the price of soda is $2. The consumer spends all of their income on pizza and soda. 29. What is the consumer's budget (income) for this problem? a $62b. $26 c. $12 d. $38 30. If the consumer decides to purchase 4 units of pizzas, how much soda will the consumer purchase? A5 B.6 C....
Catherine has a monthly income of $500, which she spends on pizzas and a composite of...
Catherine has a monthly income of $500, which she
spends on pizzas and a composite of all other goods, the price of a
pizza is $5.
2. Catherine has a monthly income of $500, which she spends on pizzas and a composite of all other goods. The price of a pizza is $5 a. Draw Catherine's budget constraint. Label your values of the intercepts and the slope of the budget constraint. (Place pizza on the horizontal axis) b. Assume Catherine...
Lisa spends all her income on pizzas and soda. The table below shows Lisa's marginal utility...
Lisa spends all her income on pizzas and soda. The table below shows Lisa's marginal utility for pizza and marginal utility for soda. If the price of pizza is $10, the price of soda is $5, and Lisa has $40 to spend on the two goods, what combination of pizza and soda will maximize her utility? Please show your answers in your table by circling the equilibrium marginal utility per dollar for the two goods and units of pizza and...
Maddie spends all of her income on yarn and kittens, two normal goods. Suppose that the...
Maddie spends all of her income on yarn and kittens, two normal
goods. Suppose that the price of yarn decreases.
Maddie spends all of her income on yarn and kittens, two normal goods. Suppose that the price of yarn decreases. Which of the following is a correct explanation of the income effect of the change in the price of yarn? O The relative price of yarn has increased, so Maddie will substitute yarn for kittens. O Maddie's real income has...
A consumer earns I a week and spends his entire weekly income on new dress shirts...
A consumer earns I a week and spends his entire weekly income on new dress shirts and ties, because these are the only two items that provide utility to him. Further- more, he insists that for every shirt he buys, he must also buy a tie (without the ties, the new shirts are worthless and vice versa). Let Ps and Pt denotes the price of a shirt and the price of a tie, respectively. (a) Derive the consumer's demand function...
Alicia is a rational consumer who spends her monthly income of $1,000 on coffee and books....
Alicia is a rational consumer who spends her monthly income of $1,000 on coffee and books. The last cup of coffee she bought in January gave her a marginal utility of 5, and the last book she bought in January gave her a marginal utility of 10. Which of the following statements do we know is true? O Alicia spent more money on coffee than on books. Alicia bought more books than cups of coffee. Alicia did not spend her...
Darla has an annual income of $120 that she spends on movies, at $10 per show,...
Darla has an annual income of $120 that she spends on movies, at $10 per show, and All Other Goods. Suppose a movie theatre offers to sell her a pass that will allow her to see any amount of movies for $6 per show. The pass costs $30. On the same graph, sketch Darla’s budget line if 1) she pays $10 per ticket, and 2) if she buys the pass for $30, and then pays $6 per ticket. Will Darla...
(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?...
Sophia spends all her money on gummy worms and apps for her smartphone. A pound of...
Sophia spends all her money on gummy worms and apps for her smartphone. A pound of gummy worms and a smartphone app each cost $2 Sophia's parents giver an allowance of $80 and 2 pounds of gummy worms each month. Draw her opportunity set, assuming that she cannot sell the gummy worms to her friends. How does her opportunity set change if she can sell the gummy worms at the market price of $2?
Use the following information to answer questions 298 30. Assume a consumer purchases 5 pizzas and 4 sodas. The price of pizza is $6 and the price of soda is $2. The consumer spends all of their income on pizza and soda. 29. What is the consumer's budget (income) for this problem? a $62b. $26 c. $12 d. $38 30. If the consumer decides to purchase 4 units of pizzas, how much soda will the consumer purchase? A5 B.6 C....
Catherine has a monthly income of $500, which she
spends on pizzas and a composite of all other goods, the price of a
pizza is $5.
2. Catherine has a monthly income of $500, which she spends on pizzas and a composite of all other goods. The price of a pizza is $5 a. Draw Catherine's budget constraint. Label your values of the intercepts and the slope of the budget constraint. (Place pizza on the horizontal axis) b. Assume Catherine...
Lisa spends all her income on pizzas and soda. The table below shows Lisa's marginal utility for pizza and marginal utility for soda. If the price of pizza is $10, the price of soda is $5, and Lisa has $40 to spend on the two goods, what combination of pizza and soda will maximize her utility? Please show your answers in your table by circling the equilibrium marginal utility per dollar for the two goods and units of pizza and...
Maddie spends all of her income on yarn and kittens, two normal
goods. Suppose that the price of yarn decreases.
Maddie spends all of her income on yarn and kittens, two normal goods. Suppose that the price of yarn decreases. Which of the following is a correct explanation of the income effect of the change in the price of yarn? O The relative price of yarn has increased, so Maddie will substitute yarn for kittens. O Maddie's real income has...
Alicia is a rational consumer who spends her monthly income of $1,000 on coffee and books. The last cup of coffee she bought in January gave her a marginal utility of 5, and the last book she bought in January gave her a marginal utility of 10. Which of the following statements do we know is true? O Alicia spent more money on coffee than on books. Alicia bought more books than cups of coffee. Alicia did not spend her...
(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?...
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