(1A) If the consumer's income and all prices simultaneously decrease by one-half, then theoptimum consumption bundle will:a. shift outward relative to the original optimum.b. move leftward along the original budget constraint.c. shift inward relative to the original optimum.d. not change.Answer for Question 1A:(1B) Two companies, Acme and Pinnacle, each decide whether to produce a good quality productor a poor quality product. In the figure, the dollar amounts are payoffs and they represent annualprofits for the two companies.Acme's DecisionGood QualityРoor QualityAcme's profit = $6 millionAcme's profit = $5 millionGood QualityPinnacle's profit = $6 millionPinnacle's profit = $8 millionPinnacle'sDecisionAcme's profit = $8 millionAcme's profit = $7 millionPoor QualityPinnacle's profit = $5 millionPinnacle's profit = $7 millionIf this game is played only once, then the most likely outcome is that:a. both firms produce a poor quality product.b. Acme produces a poor quality product and Pinnacle produces a good quality product.c. Acme produces a good quality product and Pinnacle produces a poor quality product.d. both firms produce a good quality product.Answer for Question 1B:

(1A) If the consumer's income and all prices simultaneously decrease by one-half, then the optimum consumption bundle will: a. shift outward relative to the original optimum. b. move leftward along the original budget constraint. c. shift inward relative to the original optimum. d. not change. Answer for Question 1A:

(1A) If the consumer's income and all prices simultaneously decrease by one-half, then the optimum consumption bundle will: a. shift outward relative to the original optimum. b. move leftward along the original budget constraint. c. shift inward relative to the original optimum. d. not change. Answer for Question 1A:

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 17SQ

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For the Price-Consumption Line & Demand Curve: (kindly place Good A on the X-axis & Good B on the Y-axis) If the consumer's tastes are given by the Indifference curves schedule and Pa = P1.00, Pb= P1.00 and original budget = P10.00, what happens if budget remains the same but the price of Good A decreases to P0.50 To do: Create the new budget schedule. Plot the 2 budget lines with the 3 indifference curves together and determine the tangency points or LCPC and create the Price-Consumption Line. Create the Demand Curve for Good A.
Suppose you have a budget of $200 to spend on two goods, X and Y. Good X costs $10 and provides a utility of 500 - 2q, where q is the amount consumed. Good Y costs $5 and provides a utility of 500 - 3q. What combination of consumption of these two goods will maximize your overall utility? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Explain how Consumer Choice Theory helps explain decisions concerning the consumption of two goods. Further, discuss how Indifference Curves apply to this theory and the role played by the Budget Constraint. Note: apply the goods to inputs used in your fictitious business idea.
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Explain very much in detail, using graphs you draw on your own, but also proper English reasoning and math, why the optimum consumption point is defined by the tangent to the indifference curve having the same slope as the budget constraint. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
If BC2 is the relevant budget constraint, then which bundle (combination of X and Y goods) will maximize this consumer's untility? A. A. B. B. C. C. D. D. E. E. F. F. G. G. H. H. I. I. J. J.
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Question 1 - If a household's income doubles, its budget constraint will a-shift out parallel to the old one.b-pivot at the Y-intercept.c-shift in parallel to the old one.d-be unaffected.
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Q5. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F. Suppose as Case A, Total income is $120 and per unit prices of Food (F) and Cloth (C) are $2 and $10, respectively. a. What is the value of MRS at the optimal point and what does this value mean? b. What is the optimal consumption bundle i.e (F*,C*)? c. Plot the budget line and clearly depict the point of optimality in the F (x-axis)-C (y-axis) space. d. Now suppose Case B, where assuming if income decreases to $100, holding all else the same, do the same analysis (parts a-c) and contrast your answers to Case A. For part c, you should draw old (Case A) and new (Case B) budget lines/point of optimality.
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