### Question 7This graph represents the relationship between expenditures and income.#### Graph Explanation- **Axes**: - The vertical axis represents "expenditures, income" ranging from 0 to 120. - The horizontal axis represents "income: Q" ranging from 0 to 120.- **Lines**: - The line labeled **Q** represents actual expenditures and income. - The line labeled **AE1** and **AE2** are aggregate expenditure lines, showing different levels of planned expenditures.#### Question07. The shift from AE1 to AE2 will cause equilibrium income to change to:- (a) 50- (b) 20- (c) 60- (d) 75The diagram illustrates how changes in planned expenditures can affect equilibrium income. To find the new equilibrium, observe the intersection of AE2 with the income line **Q**.

QUESTION 7 expenditures, income 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 40 07. The shift from AE1 to AE2 will cause equilibrium income to change to: O (a) 50 Ⓒ (b) 20 O (c) 60 O (d) 75 O AE2 AE1 50 60 70 80 90 100 110 120 income: Q

QUESTION 7 expenditures, income 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 40 07. The shift from AE1 to AE2 will cause equilibrium income to change to: O (a) 50 Ⓒ (b) 20 O (c) 60 O (d) 75 O AE2 AE1 50 60 70 80 90 100 110 120 income: Q

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.

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Step 1: Define aggregate expenditure.

Aggregate expenditure is the sum of consumption, investment, government spending and net export.

The equilibrium is where the aggregate expenditure curve intersects the 45° income curve.

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