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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education