A demand schedule for a normal good is as follows: Price Quantity demanded  Rs.230  70 210  90 190 110 170 130 Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not.    Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?

Q: If a household’s marginal utility from some good falls very rapidly as it consumes more of it, is…

A: Before answering the question , we need to know about the terms  Marginal Utility and Price…

Q: In the below figure, a consumer is initially in equilibrium at point C. The consumer’s income is…

A: A consumer has the following budget line:

Q: What type of function is the utility function expressed as u(x,y)=30lnx + y? Also, how would you go…

A: A utility function u (x, y) speaks to a customer's inclinations. That is, a utility function gives a…

Q: Jane has the utility function U(x,y) = x(y+3). The price of x is 2₺ and the price of y is 1₺. Income…

A:

Q: Popeye's income declines, and as a result, he buys more spinach. Is spinach an inferior or a normal…

A: Normal goods are those good which increases the demand for good when the income of the consumer…

Q: Mary makes the following choices of X1 and X2 when prices and income are as follows:…

A: Demand for inferior goods declines with the increasing income of consumers and demand for normal…

Q: Suppose when a person’s income increases, his or her demand for mac and cheese decreases. What is…

A: There exists a positive relation between income of a consumer and demand for normal good. There…

Q: Q71 If the price of a normal good changes, the income effect of the price change...

A: A normal good is one that has an increase in demand as a result of rising consumer income. Income…

Q: Show that the two utility functions given below generate identical demand functions for goods X and​…

A: Utility function with the same marginal rate of substitution (MRS) will going to generate the same…

Q: Consider the following utility functions: U(Xx.n-x2+2r For the above utility function, derive the…

A: We have Utility function = U(x,y)=x12+2y, where x= quantity of good x and y= quantity of good y…

Q: 3.1. Explain, with the aid of examples, the following economic concepts in terms of utility theory:…

A: Utility means satisfaction which is derived  by the consumption of goods and services . There are…

Q: The price of cake falls and as a result the demand for ice cream increases. What can we conclude?…

A: As the price of the cake falls makes the demand for ice cream increases, therefore both goods are…

Q: An individual has $12 dollars to spend on the two goods (y=12). The price of good #1 is $2 (p1=2)…

A: The utility function indicates that as consumption of a good increases, the total utility derived by…

Q: Consider the market for lattes. If consumers view cappuccinos and lattes as substitutes, what would…

A: Given cappuccinos and latte as substitutes. Therefore as the price of cappuccinos decreases, the…

Q: Consider a world in which only two goods are sold: x and y, and where good x is inferior. A. |Write…

A:

Q: Consider an individual whose preferences are represented by the utility function U(x1,x2) = min…

A: Given Utility function u(X1,X2)=min{3X1+X2,X1+3X2} Demand function is the function of good's own…

Q: For normal goods A) the substitution effect of a price decrease will decrease the quantity of the…

A: A normal good is a product which is undergoing a spike in demand leading to a growth in the earnings…

Q: If the demand curve for product A moves to the right, and the price of product B increases, it can…

A: The law of demand asserts an inverse relationship between the price of a good or service and its…

Q: Popeyes's income declines, and as a result, he buys more spinach. Is spinach an inferior good or a…

A: Inferior goods are those goods whose demand fall with the rise in buyers income and vice versa.

Q: Question attahed in image

A: The study of consumer behavior is one of the fundamental issues in microeconomics. Consumer behavior…

Q: The term “law of diminishing marginal utility” used in explaining downward sloping demand curves,…

A: Law of diminishing marginal utility explains the law of demand which states that there is an inverse…

Q: Agree or disagree, if both coffe and tea are normal goods and the price of coffe increase, it will…

A: Normal goods are those goods which have positive relationship with the income of consumers.

Q: Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and…

A: Substitute goods are those goods that are used for the same purpose. For example, Tea and coffee are…

Q: Now suppose that the good is an inferior good. Would the demand schedule still be valid for an…

A: Inferior goods: - if the quantity demanded of good decreases with the increase in consumer’s income,…

Q: What happens to demand for normal goods when there is rise in substitute goods

A: Demand refers to a commodity that a consumer wish to purchase at a given price in a given period of…

Q: What is the sum of the own price elasticity of demand for X, the cross price elasticities, and the…

A: Own price elasticity shows the change in quantity demanded of a good due to one percent change in…

Q: What is the difference between substitutes and complements? Indicate two goods that are substitutes…

A: Two goods are said to be substitutes of each other if they can be easily replaced with each other.…

Q: The figure below shows a consumer maximizing utility at two different prices (the left panel) and…

A: In this question, we have to find the compensating variation due to an increase in the price of…

Q: Sohail’s income declines and as a result, he buys more pumpkin juice. Is pumpkin juice an inferior…

A: As Sohail buys more pumpkin juice as his income declines, here pumpkin juice is an inferior good.…

Q: Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a…

A: A good is considered to be inferior when an increase in income causes a decrease in the demand for…

Q: Suppose that a consumer spends a fixed amount of income per month on the following pairs of goods:…

A: ANS Let us suppose that there are 2 commodities X and Y if the DD of X increases when the price of Y…

Q: hich of the following statements is TRUE regarding the relationship between Complimentary Goods? a…

A: Demand denotes the volume of goods and services that the consumers are willing to purchase at…

Q: As consumers experience an increase in income, the demand for designer clothes increases and the…

A: Explanation  As consumers experience an increase in income, the demand for designer clothes…

Q: Two goods are complements when a decrease in the price of on O decreases the quantity demanded of…

A: As per the law of demand, price has an inverse relationship with quantity demanded

Q: or Sara, ramen noodles are a normal good, however Sean considers ramen noodles to be inferior. If…

A: The measure that depicts the percentage change in quantity being demanded for a good with respect to…

Q: What will happen to demand curve for normal goods when there is rise in price of substitute goods

A: A replaceable good is a commodity or service that buyers perceive to be exactly the identical as or…

Q: Which of the following will not cause a good’s entire demand curve to shift? Group of answer…

A: A demand curve is a line that provides information about the behavior of demand-side participants…

Q: Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?…

A: The items that are movable and are being sold to a specified buyer are known as goods. These could…

Q: A change of which of the following will not directly shift the demand curve for Regular Coke?…

A: A shift in demand curve occurs when the quantity demanded of the good increases or decreases at the…

Q: From the consumer’s viewpoint, which of the following is to get the most total satisfaction or value…

A: Customer satisfaction: The degree to which customers are satisfied with items is known as customer…