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- 11) Assume Gloria is initially in equilibrium and that X and Y are normal goods for her. Then the price of X falls. For Gloria to move to a new equilibrium point her consumption ofA) X must decrease.B) X must remain constant, but her consumption of Y must decrease.C) X must increase.D) both X and Y must decrease.Intermediate Microeconomics Problem 1: Suppose two goods are perfect complements and the price of good x increases. (a) Draw indifference curves and budget lines to show the initial and new equilibrium. (12) (b) What is the total effect resulting from the price increase of good x?(c) What is the income effect resulting from the price increase of good x?(d) What is the substitution effect resulting from the price increase of x?(e) Provide an intuitive explanation for your answers in (b)-(d).(f) Sketch the consumer’s Marshallian demand curve for good x. Label clearly the pointsthat you used in deriving your graph and label this curve Dm.Please answer all the questions. Thanks in Advance.A consumer is in equilibrium when Px = 7 and Py = 4, and he is consuming 40 units of good X and 80 units of good Y. If Py increases to Rs. 5, he moves to a new equilibrium where he consumes 50 units of good X. Beginning from the new equilibrium, if income increases by Rs 100 and the consumer decides to consume 65 units of good Y, what will be the shape of the ICC and the Engel curve? Calculate and explain. Also draw the demand curve for Y indicating the above scenario.
- The following are market demand and supply equations for a perfume product:QD = 70 − 4PQS = 10 + 2Pwhere P is, QD and QS are quantity demanded and supplied of perfume, respectively.A) What is the equilibrium price and quantity? Calculate using the arithmetic method.B) Draw demand and supply curves for prices £0, £4, £6 ... £16.C) Suppose consumers’ income increases and perfume is considered as a normal good. As a result, the new demand equation is QD = 100 − 4P. Find the new equilibrium price and quantity of perfume.1. Assume that the inverse demand function for a good is given by p=f (q)=25/(2+q2), where p denotes the price per unit of the good in dollars and q denotes the quantity demanded of the good. Find the rate of change of quantity with respect to price.Which of the ff. is correct with regards to the demand curve? A. If the price of the good increases, the demand curve for the good will shift to the left B. If the price of the good increases, the consumers have the incentive to look for substitutes, thus, the quantity demanded and its price are inversely related C. Income of the consumers is written on the vertical axis D. Varying preferences of the consumers is reflected in the demand curve and is written on the horizontal axis
- The market for cellular phones has seen a combination of improving telecommunication technology and rising consumer incomes. Suppose you are told that the price of cellular phones decreased over the past five years. The decreasing prices of cellular phones, a normal good, implies that the magnitude of: A. he rightward shift of the demand curve is greater than that of the rightward shift of the supply curve B. The leftward shift of the demand curve is greater than that of the rightward shift of the supply curve C. The rightward shift of the demand curve is less than that of the rightward shift of the supply curve D. The rightward shift of the demand curve is less than that of the leftward shift of the supply curveINTERMEDIATE MICROECONOMICS 2. Clearly describe substitution effect and income effect for a fall in price for a normal good and an inferior good6. If a decrease in the price of Good X causes a decrease in the demand for Good Y, we can conclude that a. Goods X is a normal good while Y is an inferior good. b.Goods X and Y are complement goods. c. Goods X and Y are normal goods. d. Goods X and Y are substitute goods.
- Given the following situations, determine the effect on Qd or D or Qs or S for electric cars. Write ↑ Qd, ↓ Qd, ↑ D, ↓ D, ↑ Qs, ↓ Qs, ↑ S, ↓ S or no effect. For each answer, graphically illustrate using the corresponding demand curve or supply curve. Show graphical table. Label properly: Assume that this is a normal good, the income of the consumers increased. Reduction of charging stations and infrastructures for electric vehicles. Stricter regulations or compliance requirements for electric vehicle production.The demand side of the market for Sprite is comprised of 2 people. These people are William and Owen. P represents the price of 1 gallon of Sprite, and Qd represents the quantity demanded of Sprite in gallons. William's demand for Sprite is modeled by the equation QdW = 10 - 2P Owen's inverse demand for Sprite is modeled by the equation P = 10 - 2QdO (Part I) With this information, draw the market demand graph. Please label the graph for slope values, intercepts, kinks, etc. (Part II) The market supply is modeled by P = Qs. Let's say that the government places a subsidy of $8 (s = 8). As a result, what is the market equilibrium with this intervention of the government (Q**, PD**, and PS**)? (Part III) Please draw the market demand and market supply on a new graph and indicate/label the market equilibrium with the government intervention through a subsidy. Label the graph for slopes, subsidy, equilibrium points, etc.Use the following general linear demand relation: Qd = 100 − 5P + 0.004M − 5PR where P is the price of good X, M is income, and PR is the price of a related good, R. What is the demand function when M = $50,000 and PR = $10? Qd = 350 − 5P Qd = 300 − 5P Qd = 200 − 5P Qd = 100 − 5P None of the choices is correct.