A consumer consumes only good A and good B. His only source of income is an initial endowment of 40 units of good A and 10 units of good B. He insists on consuming good A and good B in fixed proportions, 1 unit of good A per 1 unit of good B. He initially faces a price of $10 per unit for each fruit. The price of good A rose to $40 per unit while the price of good B stayed unchanged. After the price change, he would (a) decrease his consumption of good A by exactly 17 units. (b) decrease his consumption or good A by at least 9 units. (c) increase his consumption of good A by exactly 5 units. (d) increase his consumption of good A by exactly 9 units. (e) decrease his consumption of good B by at least 5 units.

A consumer consumes only good A and good B. His only source of income is an initial endowment of 40 units of good A and 10 units of good B. He insists on consuming good A and good B in fixed proportions, 1 unit of good A per 1 unit of good B. He initially faces a price of $10 per unit for each fruit. The price of good A rose to $40 per unit while the price of good B stayed unchanged. After the price change, he would (a) decrease his consumption of good A by exactly 17 units. (b) decrease his consumption or good A by at least 9 units. (c) increase his consumption of good A by exactly 5 units. (d) increase his consumption of good A by exactly 9 units. (e) decrease his consumption of good B by at least 5 units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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