draw a budget constraint and indifference curves for pizza and pepsi .show what happens to budget constraint and consumer's optimum when the price of pizza rises .in your diagram, decompose the change into an income effect and a substitution effect

Q: X 12. Refer to the graph if the consumer's budget line in now the blue one and is going to consume…

A: The budget constraint is the mathematical relationship between the budget and bundles of commodities…

Q: The graph illustrates Robert's consumption of cotton candy and mini-cookies. Robert starts at point…

A: The price effect is divided into the substitution effect and income effect. When price changes, it…

Q: alculate marginal utility and marginal utility per dollar for the data provided in the table below:…

A: Price of wine = 4Price of cheese= 0.95Budget= 16.73Marginal Utility: Change in Total utility the…

Q: If Michael's budget line changes from the dashed line to the solid line in the above graph, this…

A: The combination of two goods that consumers can purchase at a given level of income is known as the…

Q: Sandra consumes water and apples. Water is an inferior good to her, apples are a normal good to her.…

A: Consider the below points: * Rise in price leads to a decrease in quantity. *Water is inferior good.…

Q: Would you expect marginal utility torise or fall with additional consumption of a good? Why?

A: The utility is something that a consumer gains after consuming a good or a product. It is measured…

Q: Explain the relationship between the budget constraint and indifference curve at consumer optimum.

A: Consumer optimum is the point of consumer's equilibrium where they get maximum level of…

Q: Suppose that Dale consumes only coffee and cheese, both of which have diminishing marginal utility.…

A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

Q: When Sam has an income of $1,000, he consumes 30 units of good A and 50 units of good B. After Samâs…

A: An individual usually consumes according to one's budget constraint. Here, the person has income of…

Q: Maya is doing her undergrad at Queen's University. She loves donuts and chocolate chip cookies…

A: The substitution effect describes the change in consumption patterns that occurs when consumers…

Q: What is the difference between the income effect and the substitution effect of aprice increase for…

A: Income effect shows the impact increase in the purchasing power on consumption, whereas substitution…

Q: 2. George has preferences for food X and clothing Y described by a utility function U(X,Y)=XY¹2 a)…

A: SE and IE are two components of the effect of the price change. SE reflects the change in quantity…

Q: Question 10 If look at the indifference curves and budget constraint for two goods, X and Y, we can…

A: An indifference curve is a graphic representation of a collection of products that give consumers…

Q: Explain the correlation between marginal utility and consumer's

A:

Q: When there is a change in price, there is an income effect and a substitution effect. Which is…

A: The income effect is that the change within the consumption of products by consumers supported their…

Q: 11. Suppose an individual has a daily income of Rs. 1,500 and spends it to consume commodities X and…

A: Income of the individual = 1500 Price of X = 75 Price of Y = 50

Q: Draw the consumer’s budget constraint (put mask on the horizontal axis). What is the slope of this…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: For Daniel, Pepsi and pizza are complementary products. He consumes a Pepsi with two slices of…

A: Complementary goods are products that increase in price when the demand for relative merchandise…

Q: If the consumer's income rises to $100 while the prices of pizza and cola are constant, then the…

A: Budget line would increase and rotate outwards towards cola axis.

Q: Assume that you only buy two goods, fish and Fanta soda. You are analyzing your personal consumption…

A: Income=$80 PFISH=$5 PFANTA= $2

Q: True or False?

A: The first statement is False. A decrease in income does not pivot the budget line around the bundle…

Q: The graph represents a budget constraint showing the purchases of Good X and Good Y. If the price of…

A: Budget constraint refers to limitations that individual or firm faces when trying to allocate their…

Q: Bridget's preferences for apples( X) and bananas(Y) can be represented by the utility function…

A:

Q: 8. Normal and inferior goods Antonio likes going to the ballpark to watch baseball, and he also is…

A:

Q: Nick's utility over hummus (h) and books (b) is described by U(Qh, Qb) = Q.7 Q0.³. (a) Nick has $60…

A: Nick's utility function: Nick's income =$60. Price of hummus =$6 per unit.The price of books is $18…

Q: What is “Compensating Variation”? What is “Consumer’s Surplus”? What is “Equivalent Variation”? What…

A: Utility:The utility is the power or ability of the goods and services that satisfy the consumers…

Q: Anita likes mystery novels and Bluetooth speakers. The following graph shows three indifference…

A: Therefore, Anita consumes 3 units of Bluetooth speakers and 7 units of mystery novels to maximize…

Q: A consumer has preferences over two goods, coconuts and fish. The consumer prefers more of each good…

A: Indifference curve represents the combinations of two goods between which the cunsumers are…

Q: Oscar buys only grapes and CDs, and is consuming his optimal bundle. Suppose that the price of CDs…

A: The price decrease of CDs will lead to an increase in Oscar's consumption of grapes. This can be…

Q: Illustrate and explain how consumer equilibrium is achieved using the indifference curve? Discuss…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Kawther’s income is OMR12 a week. The price of small-sized pizza is OMR3, and the price of a fresh…

A: 1. The budget line equation is given below.

Q: The graph represents a budget constraint showing the purchases of Good X and Good Y. If the price of…

A: Budget constraint refers to the graphical representation of all possible combinations of two goods…

Q: Explain using words and graphs where an individual demand curve is derived(where do they come from)?

A: Demand curve is a downward sloping linear curve showing the relationship between the price of a good…

Q: A decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph?…

A: A budget line, also known as a budget constraint, is a graphical representation of the combinations…