Help me answer this macroeconomics theory question 01bb) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how muchmoney would Robert need to be given in order to leave him just as well off after the price change as hewas before the price change?c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how muchmoney is Robert willing to pay to avoid the increase in price? no has noitsupaylale) 1 anoien052d bac, 12 alto sagsb 12 aixto song of TPage 6 Questions 6 (Demand). When the price of x, is $8 and the price of x, is $5, Jenny consumes 20 units of x, and 10units of x₂. Suppose that when the price of x₂ increases to $7, Jenny consumes 25 units of x₁.a) What type of goods are x, and x₂?b) How many units of x₂ does Jenny consume after its price increases? Hinfirst allocation of goods.Caloa) What is Robert's original optimal consumption bundle and utility?her income with theQuestions 7 (Slutsky Equation and Consumer Surplus). Robert's utility function for x, and x₂ is:omU (X1, X₂) = x1 * x2The price of x, is $1, the price of x₂ is $1, and his income is $20.Page 5

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b) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how much money would Robert need to be given in order to leave him just as well off after the price change as he was before the price change? c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how much money is Robert willing to pay to avoid the increase in price? has noiteapa yale) anoiton 1092

b) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how much money would Robert need to be given in order to leave him just as well off after the price change as he was before the price change? c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how much money is Robert willing to pay to avoid the increase in price? has noiteapa yale) anoiton 1092

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 19SQ

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In the below figure, a consumer is initially in equilibrium at point C. The consumer’s income is $400, and the budget line through point C is given by $400 = $100X + $200Y. When the consumer is given a $100 gift certificate that is good only at store X, she moves to a new equilibrium at point D. Determine the prices of goods Xand Y.Price of X: $ Price of Y: $ b. How many units of product Ycould be purchased at point A?c. How many units of product X could be purchased at point E?d. How many units of product X could be purchased at point B?e. How many units of product X could be purchased at point F?f. Based on this consumer’s preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. (Click to select) D, B, C, A D, C, A, B C, A, B, D A, B, C, D g. Is product X a normal or an inferior good? (Click to select) Normal Inferior
In the below figure, a consumer is initially in equilibrium at point C. The consumer’s income is $400, and the budget line through point C is given by $400 = $100X + $200Y. When the consumer is given a $100 gift certificate that is good only at store X, she moves to a new equilibrium at point D. a. Determine the prices of goods X and Y.Price of X: $ Price of Y: $ b. How many units of product Y could be purchased at point A?c. How many units of product X could be purchased at point E?d. How many units of product X could be purchased at point B?e. How many units of product X could be purchased at point F?f. Based on this consumer’s preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. (Click to select) D, B, C, A D, C, A, B C, A, B, D A, B, C, D g. Is product X a normal or an inferior good? (Click to select) Normal Inferior
Question 4 A consumer has income of $15,000. Masks costs $35 per mask, and sanitizers costs $70 per bottle. Draw the consumer’s budget constraint (put mask on the horizontal axis). What is the slope of this budget constraint? Suppose his income increases from $15,000 to $20,000. Illustrate what happens if both masks and sanitizers are normal goods. Illustrate what happens if a mask is an inferior good. The price of masks rises from $35 to $40 per mask, while the price of sanitizers is unchanged. For a consumer with constant income of $15,000, show what happens to consumption of both goods (assume both goods are normal goods). Decompose the change into income and substitution effects. Under what circumstance(s) if any can an increase in the price of sanitizers induce a consumer to buy more of that good? Explain. Explain how a consumer should allocate expenditure in order to achieve maximum satisfaction and analyse how a rise in income might affect that allocation.
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find the equilibrium price ratio and calculate the consumers’ demand for each of the two goods U1(x,y)=4x+2y, U2(x,y)=x+y Could you tell me why Px/Py<2, consumer will want x only? Px/Py<1 both consumers will only want x too ? Could you tell me how to find the price ratio to analysis want x only or want x,y?
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4. 1).Find the marginal utility of each of the two commodities? If the two commodities are free, what are the consumed quantities of the two commodities? 2) .If the price of X is two Riyals and the price of Y is 4 Riyals, and the income is 32, find the equilibrium quantities? 3) .If the price of Y drops to two Riyals, find the equilibrium quantities? Explain the graph?
Marcia spends her money on tee and biscuits and sugar, which she sees as perfect complements. She eats two biscuits with every cup of tea. A cup of tea costs $2 and one biscuit costs $0.2, and she spends $33.60 on tea and biscuits every week. Use a diagram measuring the number of biscuits on the horizontal axis to show her compensated variation and equivalent variation if the price of a biscuit decreases to $0.1. What can you say about the change in her consumer surplus?.