Activity 1. Answer the following questions: a. Illustrate and explain how consumer equilibrium is achieved using the indifference curve? b. How do we measure utility? Explain. c. Discuss how the demand elasticity of a product changes? Give examples.

Q: Which of the following influences people's buying plans and varies moving along a demand curve?A)…

A: Demand represents the volume of goods and services that the consumers are willing to buy at…

Q: 1. Classify each pair of goods as substitutes, complements, or independent. - shoes and sandals  -…

A: Substitutes are goods that are used in place of the other. Complements are goods that are used…

Q: compute the marginal utility of good X (MUX) and the marginal utility of good Y (MUY). b. U=U ( X…

A: Answer: Given, Utility function: U ( X ,Y )=X0.5Y0.4

Q: The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y…

A:

Q: Weekly income=$60 Burger= $12 each Books= $6 each Points A and B are utility maximizing choices.…

A: Hello. Since you have posted multiple parts of the question and not specified which part of the…

Q: The demand of normal good rises when the income of consumer is rising True/False

A: In a market, goods are classified as normal good, inferior good, Giffen good, and so on.

Q: Find the attached file.

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

Q: gd A and good b: perfect compliment i buy $80 on good a and b monthly the pricing of the 2 gds are…

A: Given  Good a and good b are perfect complements to each other.  Consumer monthly income = $80 Price…

Q: Choose the best/correct answer.  ___1. The elasticity coefficient is more than or greater than one.…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first three questions for…

Q: 4. Price and demand are positively correlated in case of A. O Normal goods B. O Comforts C. Giffen…

A: Usually demand is negatively sloped showing inverse relationship between price and quantity…

Q: Effect of an increase in income leads to: an increase in the consumer's utility. The statement is…

A: Income effect is the change in demand for a good or service caused by a change in a consumer's…

Q: . You consume only coke and pasta. One day, the price of coke goes up, the price of pasta goes down,…

A: The IC (indifference curve) represents the combinations of two products that yield the same utility…

Q: Explain the term  Shift in consumer preferences

A: The shift in consumer preferences can be defined as a change in the preference for the goods…

Q: Explain consumer equilibrium with the help of indifference curve. Also discuss the practical…

A: Consumer Equilibrium is the situation in which consumer spends his given income on one or two goods…

Q: A consumer’s preferences between goods x and y are represented by the utility function u(x, y) =…

A: Utility function u(x, y) = 2min{x, y}+10 consumer income of $16 the price of good x is $3 the price…

Q: 2. A consumer's demand for the single good x is given by x(p, y) = y/p, where p is the good's price,…

A:

Q: Q.to determine whether goods are subtitle or compliment,an economist would calculate what? 1.price…

A: To determine if the goods are substitutes or not, the economist would calculate the price elasticity…

Q: A consumer with I dollars budget has the utility u(x,y) = x(y+1) over amounts of cake (x) and ice…

A: U = x(y+1) = xy +x Price of X good=Px Price of Y good= Py Income of the consumer=I

Q: how do I illustrate an increase in a price of an item resulting in consumers buying another item

A: Law of demand says the more of goods is purchased at low price and vice versa keeping other factors…

Q: B) The diagram below shows indifference curves and budget lines. The initial budget line is A:B1.…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: ncome per week= $60 $12 per ticket $6 per burger Points A and B are utility maximizing choices.…

A: Income effect + Subsitution effect = Price effect.

Q: Chapter 5 Principles of Economics What is the relationship between price elasticity and position on…

A: Elasticity: It refers to the degree of responsiveness of quantity demanded with a change in the…

Q: Sarah has a budget of 58. Her utility function if U(x,y) = x*y. %3D The price of good x is 1, the…

A: Given: Budget = M=58 Price of good x = 1 Price of good y = 8 Budget constraint equation: Pxx+Pyy=M…

Q: a) Choose X, and X, to max the utility fxn, UX,X)=ch.X;+Q-a}h.X; st: M - P, X, + P;X ; a) Write down…

A: The utility function is: U(X1, X2)=αlnX1+(1-α)lnX2 Let M be the income and let P1, P2 be the prices…

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: Use a well labelled diagram and illustrate the consumer equilibrium by drawing a budget constraint…

A: Answer: Introduction: An inferior good: an inferior good is a good whose demand decreases as the…

Q: QUESTION THREE 3.1 Discuss two (2) cases of price elasticity of demand. Use diagrams to motivate…

A: The measure that depicts percentage change in quantity being demanded with respect to change in…

Q: use the demand function below to answer the questions that follows Qdx = 3/4 - 1/3Px - 5Py + 2Pz -…

A: The quantity demanded of the good is defined as the amount of the good consumers are willing and…

Q: Solve these consumer choice problems: a. Suppose a consumer has a utility function u(x, y) = xy + 7y…

A: Utility function : u(x, y ) = xy + 7y  px = 1 , py =2  , Income = 10  Budget Constraint : x + 2y =…

Q: Question 2. A consumer has the utility function U(q1,q2) = q10.5 + q2 Assume p2 = 1 and Y = 100.…

A: We are given :  Utility function : u = q10.5 + q2Budget: Y (income) = 100 P2 = 1 P10  = 1 , P11 = 4…

Q: A consumer’s budget set for two goods (X and Y) is 600 ≥ 3X + 6Y.                a. Illustrate the…

A: A budget set is a collection of all conceivable combinations of two items that a consumer may…

Q: 2) The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget…

A: Given: Income= M = $20, price of snacks= Ps= $0.5 As given the optimum bundle is obtained at MRS=…

Q: Question 3 (Demand). Carlos really likes pizza. His utility function for Little Caesar's (x) and…

A: The consumer's demand theory would result in the indifference curve analysis with the budget line.…

Q: price elasticity of demand measures

A: Price elasticity of demand:   The ratio of the relationship between the change in quantity demand to…

Q: The figure below shows a consumer maximizing utility at two different prices (the left panel) and…

A: From the utility maximizing point A : Consumption of x = 24  Consumption of y = 48  From Graph 2 :…

Q: Either find a utility function for each of the examples or discuss what properties should it have.…

A: Economists formulate the theory of consumer behavior on consumer preferences and utility is…

Q: ketch a person’s indifference map and budget line for two goods, X on the horizontal axis and Y on…

A: Initially, the optimal bundle is (X*,Y*).The optimal consumption point is E1. (a) A rise in the…

Q: Conceptual Questions: a. Can a good ever be an inferior good at all levels of wealth? If so, plot an…

A: Meaning of Normal Goods and Inferior Goods: In a situation of increase in income, more of normal…

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

A: A budget line represents the configurations of two goods that a buyer can consume provided a budget…

Q: Weekly income=$60   Burger= $12 each   Books= $6 each   Points A and B are utility maximizing…

A: Part a) Income and substitution effect are two economics effect that goes hand in hand during the…

Q: Good Y U, Xg Xx Good X The budget line shift that moves the consumer's equilibrium from point A to…

A: At point A, XA units of good X and YA units of good Y are consuming Due to decrease in price of good…

Q: 9. The X-intercept of the budget constraint represents how much of good Y can be purchased if no…

A: The budget constraint is the summation of multiplication of price of good x to the quantity of good…

Q: A change in which of the following will not shift the demand curve for hamburgers? Price of hot dogs…

A: The shift in the Demand curve: The shift in the demand curve of a commodity occurs due to the other…

Q: Ms. Zamai spends his entire income on pizzas and siomai. She always buys positive quantities of both…

A: Cross price elasticity of demand measures the responsiveness in the quantity purchased of one…

Q: Sumaiya, who consumes pepsi and pizza, gets a raise in her income from $300 to $400. Pepsi costs her…

A: Inferior commodity is an economic term that describes a commodity whose demand falls as people's…

Q: How do you think income elasticity affects a normal good versus an inferior good? Provide an example…

A: Giffen goods are those goods that show the positive relationship between price and quantity demanded…

Q: What is the cross-price elasticity of turkey for these preferences? ax Cross-price elasticity of…

A: Cross price elasticity derives the relationship between two goods and determine whether they are…