If price consumption curve is positively sloped, two goods are complements two goods are substitutes one good is normal and the other good is inferion both goods are normal goods

Q: If a 9 percent Increase in the price of Good A results In an Increase of 13 percent in the quantity…

A: If a 9% increase in the price of Good A increases the quantity demanded of Good B by 13% then it can…

Q: Assume that x1, x2 are ordinary goods. X₁ is an inferior good and x2 is a normal good. Draw a…

A: The Slutsky decomposition is a mathematical technique that has been used in economics for a long…

Q: A consumer has the utility function U(x1,x2) = min{2x1,x2} and an income of $200. Initially, the…

A: For a fixed proportion utility function, utility is maximized when 2x1 = x2 Plugging in generalized…

Q: Bundle A is the utility maximizing bundle for an individual with an income of y facing a price of p1…

A: An illustration of (nearly) perfect substitutes we have effectively seen is green and blue pens.…

Q: Consider a simple quasi-linear utility function of the form U(x, y) = x + In y. a. Calculate the…

A: Since you have posted a question with multiple sub-parts, we will solve the first 3 sub-parts for…

Q: Suppose that an individual consumes two goods X and Y, and his direct utility function is given by:…

A: Consumer theory studies the behavior of consumers how they spend their income based on their…

Q: Mary makes the following choices of X1 and X2 when prices and income are as follows:…

A: Demand for inferior goods declines with the increasing income of consumers and demand for normal…

Q: Give the definition of (gross) complements and substitutes. Draw the indifference curves associated…

A: please find the answer below.

Q: Suppose the price of potatoes falls and we observe a decrease in an individual's purchases of…

A: A good is a Giffen good if its quantity demand falls with fall in price.

Q: Suppose that the consumer has a utility function u(a, b) = min (2a, b). The price of both goods is…

A: Recall that the utility function of the form u(a, b) = min(2a, b) represents goods which are perfect…

Q: Lary's demand function for good X is XL = 0.5 M/p where p is the price of the good and M denotes…

A: Answers   Engel curve depicts the relationship between demand of a good and income of consumer. XL…

Q: are goods which are used together or jointly. a. Inferior goods b. Complementary goods c. Substitute…

A: Substitute goods are those goods which can be used alternatively or in place of one another and both…

Q: Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, X and Y are…

A: The goods are consumed in fixed proportions means the consumption of the good is complemented to…

Q: The utility function of a consumer is U = X²Y, her income is M = 100€ and the prices of the goods…

A: The Engel curve depicts how household spending on a specific commodity or service fluctuates as a…

Q: Consumer consumes only two goods. Her preference over these two goods is given by u(x1, x2) = 2x1 +…

A: In the question above, it is given :    Consumer consumes two goods. Preference : u(x1 , x2) = 2x1…

Q: State true or false  Normal goods have positive relationships between income and demand

A: Depending upon how the consumer reacts to the demand of a particular good or service whenever there…

Q: mand functions for the following preferences:   1. Perfect Substitutes   2. Perfect Complements…

A: x and y goods are the perfect substitutes for each other. so the demand curve will be sloping…

Q: If income consumption curve is positively sloped, one good is inferior and the other good is normal…

A: Income consumption curve is the locus of different combinations of two goods that shows consumption…

Q: An individual demand curve can be derived from the __________ curve.

A: Demand is the total quantity of products and services for which the customers are willing to pay…

Q: George consumes only two goods, pizza and compact discs. Both are normal goods for George. Suppose…

A: *Answer:

Q: : Substitute goods; Complementary goods; IRR

A: Substitute goods: These are the types of goods which are consumed in place of each other. Hence the…

Q: A consumer is choosing between magazines an His optimums are shown on the graph to the right.…

A: Since PCC is horizontal, it means that change in price of books does not change demand for…

Q: If the price pf pasta increases and a consumer buys more pasta, we can infer that  a. pasta is a…

A: If the price pf pasta increases and a consumer buys more pasta, we can infer that  a. pasta is a…

Q: Consider an individual whose preferences are represented by the utility function U(x1,x2) = min…

A: Given Utility function u(X1,X2)=min{3X1+X2,X1+3X2} Demand function is the function of good's own…

Q: Identify the two goods which are substitutes. (Multiple Choice) A) Good Y and Good Z B) Good X and…

A: Substitute goods are goods that can be used as alternates for the same purpose. Soo, these goods…

Q: For normal goods A) the substitution effect of a price decrease will decrease the quantity of the…

A: A normal good is a product which is undergoing a spike in demand leading to a growth in the earnings…

Q: OA. illustrates two goods that are perfect substitutes. OB. illustrates two goods that are perfect…

A: The L- shaped indifference curves are for perfect complements. It implicates being used…

Q: Identify the type of goods which have negative income demand. a. Substitute goods b. Inferior goods…

A: Substitute goods are those goods which can be used alternatively or in place of each other and get…

Q: Question 2 Determine the equation of the income offer curve for the following utility function when…

A: 1) u(x1,x2) = log(x1) + 2log(x2)2) u(x1,x2) = x1 - 1x23) u(x1,x2) = 2x1 + 4x2P1 = 1 and P2 = 1 and M…

Q: Consumer 1 has the utility function xy x+y subject to PxX + pyY = m Derive the generalized demand…

A: Given utility function: U=xyx+y Budget constraint: PxX + PyY = m

Q: Jack consumes only Bread (good x) and Cheese (good y). His utility function is given by U(x, y) =…

A: Given  Jack's utility function: U(x,y)=ln(x)+ln(y)           ...... (1) Where x denotes bread and y…

Q: Arya only consumes two goods: X and Y. When the price of X changes, the income effect and the…

A: For normal goods : Income effect says that decrease in price of one good increases quantity demanded…

Q: Suppose a consumer purchases food X and clothing Y. The utility function of the consumer is given…

A: Consumer purchases food X and clothing Y Utility function of consumer; U(X,Y)=XY+5Y Income of…

Q: The price of meatballs increases, and as a result, the demand curve for salad shifts to the right.…

A: Substitute goods: Those goods are said to be substitute goods when they are used for the same…

Q: The utility function is x+min(6.y). Income is 12, price of good x is 3. Price of good y decreased…

A: SUBSTITUTION EFFECTS- It means the change in the number of goods with respect to a change in the…

Q: If the demand function face by the consumer for good X is given by             X=15+MP-120 Where X…

A: Total Effect = Substitution Effect + Income Effect  Substitution Effect refers to that change in…

Q: Using the utility-maximization rule as your point of reference, explain the income and substitution…

A: The utility is measured ordinally through indifference (IC) curve approach. The IC is a locus of…

Q: When goods are complements, there is a direct relationship between the price of one and the demand…

A: Complementary goods are those goods that are demanded jointly to fulfil single wants. This means…

Q: Suppose that after your income increases, you consume less fast food. This means:     Fast food is…

A: According to the income effect, a rise in the income of a consumer leads to a fall in the demand for…

Q: Ricky has utility function u=x?y. This implies that MUx=2xy. MUy=x². His income is 100. The price of…

A: utility function is an important concept that measures preferences over a set of goods and services.…

Q: Answer the attached question

A: Substitutes goods are used in place of each other while complement goods are used together.

Q: Determine the equilibrium quantities of commodities x and z for a consumer whose total utility (U)…

A: The term "consumer equilibrium" refers to a scenario in which a consumer is completely satisfied…

Q: Consider that Pepsi (P) and Coke (C) are perfect substitutes. Draw the graph of an indifference map…

A: An indifference curve (IC) shows combination of two goods (substitutes or complements) that give a…

Q: The change in consumption of a good that occurs when its price falls is the result of Select one:…

A: Income effect refers to the change in the quantity of good due to change in the price of that good,…

Q: Suppose the two goods, X1 and X2, are perfect substitutes at the ratio of 1 to 2 – each unit of X1…

A: Utility function is U = 2X1 + X2 The marginal rate of substitution which is the ratio of the…

Q: "Two goods, A and B are perfect substitutes with prices $PA and $PB respectively. The income of an…

A: In ordinary cases when indifference (IC) curve is convex to the origin, the consumer’s equilibrium…