6. Suppose the following information regarding Joe's consumption habits.Quantity ofWineQuantity ofВooksPrice of WinePrice of BooksIncome$10$12$15$20$10$10$10$10$150$150$150$15075949211Graph Joe's demand curve for wine and price-consumption curve for when the price of winechanges.

When the price of a commodity varies, the price-consumption curve (PCC) shows how much of it a…

Answered: 6. Suppose the following information…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Suppose that a decrease in the price of X results in more of good Y sold. What are X and Y called? a. complementary goods b. normal goods c. inferior goods d. substitute goods
stion 96 A decrease in the price of coffee, other things being equal, causes a(n): leftward shift in the demand curve for coffee. O downward movement along the demand curve for coffee. Orightward shift in the demand curve for coffee. O upward movement along the demand curve for coffee.
Carla consumes 10 juices per week when the price is $1.50 per unit. A reduction in this year's orange crop lead to 50% an increase in the price of juice. At the new price level Carla's weekly juice consumption cell to 6 units. calculate Carla's own-price elasticity of demand for juice.
22
3. If goods R and K have a cross elasticity of -3 and goods R and S have a cross elasticity of 5, then, what relationship exists between goods R and K? between R and S?
3. Joe Snow’s income declines as he rejoins the Black Watch, and as a result, he buys more wine. Is wine an inferior or a normal good for Jon? What happens to Jon’s demand curve for wine?
The diagram shows Sam's budget line. Which of the following would result in Sam's budget line shifting leftward and not changing its slope?
05- Income and Substitution Effects Question 4
11 BIUA + Arlal I| II1 I I 2 The following questions are about income elasticity of demand. 9) Mr. Leon's income increased by 10%. (His "mommy" gave him a raise in his allowance because he was a "good little boy.") His consumption of Lego's then increased by 25%. Calculate his income elasticity. Does this imply that Lego's are a regular or an inferior product for Mr. Leon? 10) Mr. Mendivil's income increased by 20%. His consumption of pictures of Mr. Leon then decreased by 100%. Calculate the income elasticity of demand for the product. Does this imply that pictures of Mr. Leon are regular or inferior products? 11) Larry the Wild & Crazy Monkey saw a decrease in his income by 25%. With this, his consumption of berries increased by 50%. Calculate his income elasticity of demand. What can we conclude about berries as a consumer good for Larry the Wild & Crazy Monkey? Explain. ip lili 司
8 When the price of a pizza slice decreases from $2 to $1, the case should be in a way the None of the answers given here is correct. income effect means elasticity of demand increases from 1 to 2. quantity demanded of pizza will not change. substitution effect means people buy more pizza. O income effect means elasticity of income increases from 1 to 2.
6. John consumes strawberries and cream together and in the fixed ratio of two boxes of strawberries to one cartons of cream. At any other ratio, the excess goods are totally useless to him. The cost of a box of strawberries is $10 and the cost of a carton of cream is $10. At an income of $300, what is John's demand on cream and strawberry?
R5

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