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 $ nothing (round your answer to the nearest penny).
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A consumer spends all of her income (Y) on two goods Z and B.
The price...
(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?...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that good 1 is an inferior good at the current prices and income). If the price and also the income of the consumer doubles, how does his demand for good at all. Explain. all his income on two goods, say good 1 and good 2. Assume ces and income). If the price of both goods double w does his demand for good 1 change, if...
A basket of goods for a given consumer includes two goods, X and Z. Consumer income...
A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to $1,000 and the prices of these two goods are as follows: Px = $20 P2 = $50 This consumer is consuming 10 units of good X. Suppose that over the course of a year, the price of good X changes by - 10% and the price of good Z changes by 10%. How much income would be required for the consumer...
A consumer spends all of her income on pizzas and movies. If the price of movies...
A consumer spends all of her income on pizzas and movies. If the price of movies decreases, the consumer's opportunity set will o become negative o become smaller O stay the same Obecome larger
If a consumer is spending a small portion of his or her income on a good,...
If a consumer is spending a small portion of his or her income on a good, then the demand for the good is likely to be inelastic. True False A consumer is in equilibrium when the slope of his or her indifference curve is equal to his or her budget constraint. True False The below figure shows the various combinations of the goods X and Y that yield different levels of utility. Figure 7.3 In Figure 7.3, if the price...
Assume that there are only 2 goods, z and y (a) Amanda spends $200 on r...
Assume that there are only 2 goods, z and y (a) Amanda spends $200 on r and $300 on y when her income is $500. She spends $180 on r and $420 on y when her income is $600. For this income change, characterize the type of each good (necessity, luxury, or inferior). (2) (b) Bill spends $6 on x and $10 on y when his income is $16. He spends $8 on x and $16 on y when his...
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is...
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is 1. Hi S income is 1. His utility is given by is * and y. Px is the price of x. Py is the price of a) Calculate consumer's optim U(x,y) = xy s optimal choice of x and y under his budget.hu uncompensated demand) b) Derive the indirect utility function. c) Are these two goods normal goods? Why d) Derive the expenditure function....
Fill in the Blanks A consumer has $140 in monthly income to be spent on two...
Fill in the Blanks A consumer has $140 in monthly income to be spent on two goods A and B. The price of good A (PA) is $5.00. In the market, they can trade 2 units of good B for 1 unit of good A. The price of good B is $ (round your answer to two decimal places). If they used all their income on good A, they could purchase units (round your answer to two decimal places). Fill...
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...
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...
(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?...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that good 1 is an inferior good at the current prices and income). If the price and also the income of the consumer doubles, how does his demand for good at all. Explain. all his income on two goods, say good 1 and good 2. Assume ces and income). If the price of both goods double w does his demand for good 1 change, if...
A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to $1,000 and the prices of these two goods are as follows: Px = $20 P2 = $50 This consumer is consuming 10 units of good X. Suppose that over the course of a year, the price of good X changes by - 10% and the price of good Z changes by 10%. How much income would be required for the consumer...
A consumer spends all of her income on pizzas and movies. If the price of movies decreases, the consumer's opportunity set will o become negative o become smaller O stay the same Obecome larger
Assume that there are only 2 goods, z and y (a) Amanda spends $200 on r and $300 on y when her income is $500. She spends $180 on r and $420 on y when her income is $600. For this income change, characterize the type of each good (necessity, luxury, or inferior). (2) (b) Bill spends $6 on x and $10 on y when his income is $16. He spends $8 on x and $16 on y when his...
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is 1. Hi S income is 1. His utility is given by is * and y. Px is the price of x. Py is the price of a) Calculate consumer's optim U(x,y) = xy s optimal choice of x and y under his budget.hu uncompensated demand) b) Derive the indirect utility function. c) Are these two goods normal goods? Why d) Derive the expenditure function....
Fill in the Blanks A consumer has $140 in monthly income to be spent on two goods A and B. The price of good A (PA) is $5.00. In the market, they can trade 2 units of good B for 1 unit of good A. The price of good B is $ (round your answer to two decimal places). If they used all their income on good A, they could purchase units (round your answer to two decimal places). Fill...
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...
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