(Figure: Good Y and Good X) Which of the following statements is TRUE? Quantity of good Y 18- 16 14 12 10- 8 6- 4- 2 Budget constraint 2 Budget constraint 1 0 2 4 6 8 10 12 14 16 18 20 Quantity of good X Good X is relatively cheaper than Good Y in budget constraint 1 Good X is relatively more expensive than Good Y in budget constraint 2 Good X is relatively more expensive than Good Y in budget constraint 1 Good Y is the same price in budget constraint 1 and in budget constraint 2

(Figure: Good Y and Good X) Which of the following statements is TRUE? Quantity of good Y 18- 16 14 12 10- 8 6- 4- 2 Budget constraint 2 Budget constraint 1 0 2 4 6 8 10 12 14 16 18 20 Quantity of good X Good X is relatively cheaper than Good Y in budget constraint 1 Good X is relatively more expensive than Good Y in budget constraint 2 Good X is relatively more expensive than Good Y in budget constraint 1 Good Y is the same price in budget constraint 1 and in budget constraint 2

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 12RQ: Why does a change in income cause a parallel shift in the budget constraint?

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(Figure: Good Y and Good X) Suppose the budget constraint shifted from constraint 2 to constraint 1. What could have caused this change? Quantity of good Y 18 16 14 12 10 8 6 4 2 Budget constraint 2 0 Budget constraint 1 2 4 6 8 10 12 14 16 18 20 Quantity of good X a decrease in the price of good X relative to that of good Y an increase in the price of good X and no change in the price of Y a decrease in income a decrease in income and an increase in the price of good X relative to that of good Y
Why does a change in income cause a parallel shift in the budget constraint?
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BN7.3 (c) (d) Survivor 1 & Survivor 2 are lost in the Woods. The Quantities of Good A & Good B are in Fixed Supply. The Edgeworth Box below shows all the possible allocations of these 2 Goods & can be used to answer the following Questions: For each statement below, note whether the Statement is True or False & Why? Good B Survivor 2 B A Good A c) Point A is less efficient than Point B. True or False? Survivor 1 d) If Survivor 2 has more of Good A than Survivor 1, then Survivor 1 prefers Point A to Point B. True or False?
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Problem 3-1 [Algorithmic] Suppose there are three buyers of candy in a market: Tex. Dex, and Rex. The market demand and the individual demands of Tex, Dex and Rex for candy are given in the table below. a. Fill in the table for the missing values Two De Rex Price per Candy Total Quantity Demanded Qu 94 fa 116 3 3 2 15 S 4 15 14 5 10 22 11 14 29 9 12 11 38 7165 b. () Which buyer demands the least at a price of $13? [(Click to select) (1) Which buyer demands the most at a price of $15? (Click to select) e. Which buyer's quantity demanded increases the most when the price is lowered from $15 to $14 (n absolute terms)? [Click to select) d. () Which direction would the market demand curve shift if Tex withdrew from the market? (Click to select) Which direction would the market demand curve shift if Dex doubled his purchases at each possible price? (Click to Select) e. Suppose that at a price of $14, the total quantity demanded increases from 22 to 32. Is this a "change in the quantity…
• You are given a task for analysis the market for Sport Bike. You found that when the market price of bike is $500 the market demand is 9,200 bikes, whereas the market supply is 6,000 bikes. Yet, when the price rises to $650 the market demand is 6,800 bikes but the market supply is 8,000 bikes. Your tasks are: a) Define the equations of market demand and market supply for bike. b) Find the equilibrium-price and equilibrium– quantity and draw a graph to show this market. c) Estimate the consumers' surplus, producers' surplus and bike market's surplus.
11. Suppose that the demand and supply functions for three related goods are: q=50-2p₁ + 5p2 - 3p3, q2 = 22 +7p₁2p2 + 5p3, q=17+p₁ + 5p2 - 3p3, qi=8p₁ - 5 q2 = 12p₂ - 5 q=4p3 - 1 Use the equilibrium condition, q = q = qi, i = 1,2,3 and rewrite this system of equations in the form Ap = /P₁\