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- A consumer has $300 to spend on goods X and Y. The market prices of these two goodsare Px = $15 and Py = $5. a. What is the market rate of substitution between goods X and Y?A consumer has $300 to spend on goods X and Y. The market prices of these two goods arePx =15 and Py =5, please explain the concepts and answer the following questions● What is the market rate of substitution between goods X and Y?● Illustrate the consumer’s opportunity set in a carefully labeled diagramThe Marginal Rate of substitution depends on the O a. Tastes and preferences of the consumer B Price level of goods income of the consume Oc.income of the consumer O d. Availability of goods
- Q5 plz help quick The marginal rate of substitution of nickels for dimes is O negative and constant. O negative but varies from point to point on a given indifference curve. O zero. positive but decreases as the number of Nicole's increases11. The income-consumption curve is used to derive an individual’s demand curve.(a) True(b) FalseEren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).Use the following data to work problems from a) to e)Income = 20$, price of cake is 4$, price of coffee is 2$ a) Calculate Amy's real income in terms of cake. b) Calculate the relative price of cake in terms of coffee. c) Calculate the equation for Amy's budget line (with coffee on the left side). d) If Amy's income increases to 35$ a week and the prices of coffee and cake remain unchanged, describe the change in her budget line. e) If the price of coffee doubles while the price of cake remains at 4$ a cup and Amy's income remains at 20$, describe the change in her budget lineEren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate the change in consumer surplus from consuming the expensivemeals considering the price change (Hint: you need to compare his optimalconsumption bundle before and after the price change to get the change in CS).
- This week Sara’s income falls from $12 to $9 a week, while the price of popcorn isunchanged at $3 a bag and the price of a smoothie is unchanged at $3.g. What is the effect of the fall in Sara’s income on her real income in terms ofsmoothies and in terms of popcorn?h. What is the effect of the fall in Sara’s income on the relative price of a smoothiein terms of popcorn? What is the slope of Sara’s new budget line if it is drawnwith smoothies on the x-axis?Jeremy has a monthly income of $60. He spends his money making telephone calls (good ?, measured in minutes) at a price of ?? and on other composite good ?, whose price has been normalized to one, meaning ?? = $1. His mobile phone company offers him two plans: plan A, in which he pays no monthly fee and makes calls for $0.50 per minute, or plan B, in which he pays a $20 monthly fee and benefits from cheaper phone calls at $0.20 per minute.(a) Depict Jeremy’s budget constraint under each of the two plans, with the number of phone calls (good ?) in the horizontal axis and the composite good (good ?) in the vertical axis. (b) If Jeremy mentioned that plan A is better for him, what is the set of consumption bundles he may purchase if his behavior is consistent with WARP?Assume coffee and tea are substitutes. Assume income is $100, Pcoffee = $2 and Ptea = $4. Then the relative price of an additional cup of coffee is ______ cup(s) of tea, and the relative price of an additional cup of tea is ______ cup(s) of coffee . 2,.05 2,1 1,2 .5,2