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Q)
When the income of buyers of good X rises the
a) may rise or fall.
b) falls
c) rises
d) stay the same
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- (b) If a consumer spends all of his budget consuming exactly two goods, then is it possible that the law of downward-sloping demand does not hold for one of the goods?ii. What type of goods are petrol and gas if XED = 0.5? Complementary and High responsiveness Complementary and Low responsiveness Neutral Substitute and High responsiveness Substitute and low responsivenessSuppose your income is 200, the price of good x is 2, and the price of good y is 3. You know that your utility function is U= 2(xy)^3. (A) What amounts of x and y do you choose? (B) Can you generalize your choices to demand curves for x and y for any prices and income?
- (a) If a consumer has to choose between McDonald burger and King Burger, both are perfect substitute to each other. Explain the conditions of consumer's equilibrium with the help of graph.Suppose that an increase in income occurs at the same time the cost of producing an inferior good decreases. What will most likely happen to the quantity of the good? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a It will increase. b It will decrease. c It will not change. d One cannot tell without knowing the relative size of the changes.Assignment (1) Compatibility Mode. Saved to this PC ✓ esign Layout References Mailings Review View ons: On Problem 1 7 Problem 2 O Search (Alt+Q) Mario consumes only cheese and crackers. a. Could cheese and crackers both be inferior goods for Mario? Explain. Help Accessibility: Unavailable ▬▬▬ b. Suppose the cheese is a normal good for Mario while crackers are an inferior good. If Mario's income falls, what happens to Mario's consumption of crackers? What happens to his consumption of cheese? Explain. monica fa What is marginal rate of substitution (MRS) in Economics? Use an example to explain MRS. 2. D Foo
- 10) Figure 1 shows some indifference curves and budget lines for consumer Yusuf. Milk A B Cheese Figure 1 If Yusuf's income increases, his optimal consumption changes from point A to point B. Which of the following statements is true for Yusuf? (a) Cheese and milk are substitutes. (b) Cheese is an inferior good. (c) Milk is an inferior good . (d) Milk is a normal good. (e) None of the above.7 Asen tries to minimize his cost of using two goods x subscript 1 end subscript and x subscript 2 end subscript. The price of the first good is BGN 12 and the second good BGN 8. His utility function is x subscript 1 superscript 3 divided by 5 end superscript x subscript 2 superscript 2 divided by 5 end superscript and the utility he will get from using both goods, is 32 units. Find the Hicks quantities demanded and what Assen's minimum budget must be to consume these quantities and obtain the above utility. e-412, h2=21, h1=21 e=416, h2=21, h1=21 e=640, h1=32, h2=32 e=422, h2=21, h1=21 e=378, h2=21, h1=21 e-378, h2=20, h1=20 another answer e-378, h2=24, h1=24(c) If the preferences are concave, will the consumer ever consume both of the goods together?
- Q.1.15 The marginal utility of a good or service declines as one more unit is consumed because: (a) supply slopes upwards.(b) consumers are constrained by income. (c) of the law of diminishing marginal utility. (d) prices move with demand.(Review Question) Sarah consumes both wine ) and cheese (y) and considers them perfect substitutes. She always gets twice as much utility from consuming wine as she does cheese. What equation would represent her utility function? U-(2xy) U=x+2y U=2x+y U=min(x,2y)7) By definition, an inferior good is aa) Good for which demand decreases when income increase. b) Want that is not expressed by demand.c) Normal substitute good.d) Good for which demand decreases when its price rises.8) The study of the decisions of individual units in the economy is known asa) Microeconomicsb) Macroeconomicsc) The Study of incentivesd) Ceteris Paribus Study 9) If a good has a price, then it is considered _______ ?