For a rational consumer who has to choose between two goods in the context of budget constraints, the price change of one of the goods, ceteris paribus (i.e the other things remain the same) will determine: Wählen Sie eine Antwort: a parallel shift of the budget line to the right a parallel shift of the budget line to the left a change in the slope of the budget line no change in the budget line

Q: Which statement BEST describes the principle of diminishing marginal utility? As an individual…

A: According to the law of diminishing marginal utility, as we consume more and more of a good then the…

Q: A consumer has income of $3,000. Wine costs $3 per glass, and cheese costs $6. What is the slope of…

A: Budget line: M = Px . X + Py . Y Slope : (-) Price ofwine Price of cheese

Q: Assuming the two good case.  When a person is attempting to maximize utility and the price of one of…

A: A budget constraint is  combination of two goods which are available for the consumer at market…

Q: Suppose two goods coffee and cream provide the consumer with utility but only if they are consumed…

A: If there is an increase in price of Coffee, then it will lead to an income effect but no…

Q: Given the following budget line PxX + Pyy = m And that the slope of the budget line depends only on…

A: Note: There are multiple subparts in the question. We shall solve the first three subparts for you.…

Q: The initial budget constraint (BC¡) shows the Lacostes' budget constraint when the price of a fancy…

A: A compensating variation is the amount of extra money that a consumer will need to reach to their…

Q: You run a foundation that provides help to families during the holiday season. You distribute both…

A: Budget line shows various combination of 2 goods that a person can buy, given the prices of the…

Q: Assuming the two good case.  When a person is attempting to maximize utility and the price of one of…

A: The term utility refers to the want satisfying power of any commodity. The associated term is…

Q: Suppose the price of pizza is $10, the price of cola is $1, and the consumer's income is $60. In…

A: Given that Income(M)= 60 Px= Price of pizza = $10 Py= Price of Cola =$1

Q: In the diagram on the right the consumer's original budget line is L, and the consumer buys the…

A: In economics, the term substitution effect refers to a situation in which sales of a good will…

Q: For two goods that I consume and I like both of them, say hamburger and Ice Latte, if hamburger is…

A: Introduction: The budget line depicts all potential combinations of two commodities that a customer…

Q: A budget constraint, budget set or budget line: 1. Illustrates the combination of units of…

A: The economics is considered to be a very vast area of study, as economics is used in everyday life,…

Q: Explain the consumer's equilibrium within the budget constraint - indifference curve framework

A: Consumer equilibrium is the point of rest, that is, the bundle from which the consumer have…

Q: Avery is currently using up the entire weekly budget she has allocated to purchasing Goods X and Y.…

A: Given  Marginal utility on last unit of good X  that Avery buy by using weekly income = 14 and last…

Q: Maya divides her income between coffee and croissants (both of which are normal goods). An early…

A: There are primarily two types of products: inferior goods and normal goods. The inferior goods are…

Q: Which of the following statements is true? OThe budget line shows the utility associated with all…

A: The budget line shows all the affordable consumption bundles so the first statement is incorrect.…

Q: When the price of one'good increases and the price of the other good and income are held constant,…

A: Suppose there are two goods, i.e., X and Y Px is the price of X Py is the price of Y M is income.…

Q: Suppose a consumer has a budget of $200 to spend on two goods, X and Y, whose prices are $20 and…

A: Answer: Given, Total budget = $200 Price of good X PX=$20Price of good Y PY=$10 (d). A consumer is…

Q: A consumer is always indifferent between one unit of good A and one unit of good B, no matter how…

A: When a customer is indifferent between one unit of good A and one unit of good B, regardless of how…

Q: Suppose a consumer consumes two goods, X and Y. The slope of the budget constraint equals the a.…

A: A budget constraint illustrates the various combinations of two goods that a consumer can purchase…

Q: Suppose that the price of commodity Y is $1 per unit while the price of commodity X is $2 per unit…

A: The income of an individual or a household is what the individual receives in terms of revenue from…

Q: Assume the budget constraint and the indifference curves are both linear. Assume the consumer is…

A: An indifference curve measures the combination of two goods that provides the same amount of…

Q: If good X plotted on the x-axis, and good Y plotted on the y-axis, an increase in the price of good…

A: Budget constraint shows the amount of the two goods that can be purchased given their prices and…

Q: Suppose that the price of commodity Y is $1 per unit while the price of commodity X is $2 per unit…

A: The budget constraint refers to the combination of two goods that a consumer can buy with the…

Q: For the consumer whose choices are shown in the diagram, the substitution effect of the price change…

A: Substitution effect is change in demand or consumption of  a commodity or a service due to a change…

Q: True or false.  A budget constraint, budget line or budget set is a graphical way to illustrate all…

A: It's vital to remember that the slope of the budget line equals the cost ratio of two commodities.…

Q: Suppose the price of an M&M is $2.00, the price of Skittles is $3.00, and the budget is $24. M&Ms…

A: Budget line shows the combinations of two goods that a consumer can purchase at given market price…

Q: Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris…

A: A well-behaved consumer means the preference relation is convex and monotonic in nature

Q: draw a budget constraint and indifference curves for pizza and pepsi .show what happens to budget…

A: A budget constraint refers to the different combinations of two commodities that can be consumed by…

Q: A college student has two options for meals: eating at the dining hall for $6 per meal or eating a…

A: a. Let d and c represent the number of meals eaten in the dining hall, respectively, and Cup 0'Soup…

Q: A consumer consumes 2 goods, x and y. If the price of_good x trebles and the price of good y doubles…

A: Answer: Let us understand this with an example. Suppose the consumer initially has $100 and the…

Q: Suppose there are two goods, the prices of both goods are positive, and a consumer's income is also…

A: Consumer's income halves and price of both goods tripe

Q: During calamities, such as typhoons, fires, or the ongoing pandemic, the government provides…

A: A budget line depicts the combinations of two commodities that a consumer can consume given a budget…

Q: As a person receives more of a good, the _______________ from each additional unit of the good…

A: Wants satisfying power of commodity called utility , here we choose the correct option and explain…

Q: Leyla consumes goods X and Y. The price of good X is Px and the price of good Y is Py, Leyla’s…

A: Budget constraint refers to the different combinations of two goods that a consumer can consume with…

Q: PYQY = M, where PX = $2, PY = $1 and M = $10 (M is income) a. What is the slope of the budget…

A: The ‘optimal choice’ of the goods of the consumers is dependent on the income of the consumers. The…

Q: Bob views apples and oranges as perfect substitutes in his​ consumption, and MRS​ = 1 for all…

A: The marginal rate of substitution in economics is the amount of a good that a consumer is willing to…

Q: 1. Annie consumes two goods: sandwiches and coffee, with respective quantities s and c. Suppose the…

A: Budget line  A budget line represents the different combinations of two goods that are affordable…