### 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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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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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Given the following data, please determine how much of good A and good B should the consumer prefer to maximize utility that is within his/her budget. Money Income - PhP 120 Price of Good B - PhP 8 Unit of Product 1st 2nd 3rd 4th 5th 6th 7th 8th Determine: Good A MUa(utils) | MUa/PhP 14 10 8 7 5 4.5 2 0 Price of Good A- PhP 7 1. Amount of Good A to purchase 2. Amount of Good B to purchase Jua Good B MUa (utils) | MUb/PhP 28 24 19 13 12 6 3 1 TUR 3. Total amount purchased 4. Total maximum possible utility derived from the amount of Good A and B purchased and consumed which are within the budget constraint. 5. Show other combination/s of Good A and B that are either not within the budget constraint or does not maximize total utility. 6. Conclusion.
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Find marginal utility for each consumption level for both products and please show your work in Table.
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