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If good X is represented on the X axis and good Y on the Y axis, what will happen to the budget line if the
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- If the price of good X increases, what will happen to the budget line? It will shift outward It will become steeper It will become flatter It will shift inwardWhat happens to the budget line if the price of good 2 increases, but the price of good 1 and income remain constant?Using a budget line, why does a decrease in the price of a good allow one to potentially consume more of both goods?
- If the price of good X is $10 and the price of good Y is $5, how much of good X can the consumer purchase if her income is $15 and she spends it entirely on purchasing good X?if we take examples and suppose there are 2 products, milk and yoghurt, and if the milk is rationed for people by government, how can we understand the satisfaction maximization choice with the indifference curve and budget lineA consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5. At point A, how many units of good X does the consumer purchase? Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer positively or negatively affected by the price change?
- Draw two axes: on the horizontal axis (x-axis), represent the quantity of good x, and on the vertical axis (y-axis), represent the quantity of good y. Plot the initial budget line. The equation for the budget line is m = px * x + py * y. You can rearrange it to solve for y: y = (m - px * x) / py. With given values for m, px, and py, you can plot the line that represents all combinations of goods x and y that the consumer can afford. Plot the indifference curves. These curves represent the combinations of goods x and y that give the consumer the same level of utility. Due to the complexity of the given utility function U(x, y) = xy / (x + y), it may be challenging to plot the exact indifference curves. As an alternative, you can use a simpler utility function for demonstration purposes, such as U(x, y) = x^a * y^b (where a and b are positive constants), which results in easier-to-plot curves. Locate the initial optimal consumption bundle, which is the point where the budget line is…Suppose there are two goods, x and y. If one good has a negative price, and the other good has a positive price, then the slope of the budget constraint will be positive. is this true or false?A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5. a. What is the price of good Y? b. What is the consumer’s income? c. At point A, how many units of good X does the consumer purchase? d. Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer better off or worse off as a result of the price change?
- Graph the budget line showing all the different combinations of good ? (drawn on the horizontal axis) and good ? (drawn on the vertical axis) that can be bought given the consumer’s total income. In the graph, indicate the y-intercept and x-intercept of the budget line.Suppose the budget line changes so that the consumer achieves a new equi librium at point B. What change in the economic environment led to this new equilibrium? Is the consumer better off or worse off as a result of the price change?A halving of the prices good A and good B has the same effect on the budget line as doubling the income.