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- Paul consumes cheese and wine and his income is $200. Is it possible that when the price of one pound of cheese is $5 and the price of wine per glass is $5, Paul consumes 10 glasses of wine and 30 pounds of cheese per week, but when the price of one pound of cheese is $2 and the price of wine per glass is $10, Paul does not consume any cheese and spends all of his income on wine?Joann divides her consumption between books and games. Both books and games are normal goods for Joann. If the price of games rises, and Joann has a very strong income effect, A. Do you expect her to buy more, fewer, or the same number of games? B. Do you expect her to buy more, fewer, or the same number of books? ExplainsTammy spends her money on lemonade and iced tea. If the price of lemonade falls, it is as though her income a. Increases. b. Decreases. c. Stays the same
- Explain the impact of the change in consumer's income on the demand of goods and services.Assume that dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of _________ loaves of bread or a maximum of ________jars of peanut butter.Use the following data to work problems from a) to e)Income = 20$, 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 line
- 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?why does a decrease in income cause an increase in both equilibrum price and quanity of an inferior good, such as macaroni and cheese?Assume that a college student spends her income on books and pizza. The price of a pizza is $8.00, and the price of a book is $15. If she has $100 of income, she could choose to consume
- Income of a person is Rs.8000 and he uses 60 units of a commodity. 1. Calculate income elasticity of demand when the income increased by 30% and consumption of the good is decline by 50%. Also calculate 2. New income 3. New consumption 4. Nature of goodIllustrate the appropriate change and specify whether each change represents an increase or a decrease. When the price of chicken unexpectedly rises, many consumers choose to purchase corned beef insteadQuestion 34 Stephanos spends all of his $500 allowance on slices of pizza and gas for his pickup truck. He spends eighty percent of this on pizza and the rest on gas. Because of a shortage of gas, the price of gas increases by 40%. This makes his consumption of gas (measured in gallons) fall by 20%. If he keeps spending all his money on pizza and gas, what is the percentage change in his consumption of pizza (measured in slices)? does not change 2% increase 3% decrease 4% increase 1% decrease