In consumer theory economics, what is the difference between a necessity and a luxury good. What is the likely difference in the tax revenue obtained from a tax imposed on a necessity versus a luxury good? Explain and illustrate with appropriate figures.

Q: Suppose broccoli and Velveeta are complements in consumption. Suppose further that the price of…

A: Consumer Surplus : The consumer surplus is defined as the difference between the price which the…

Q: What are the influences on buying plans that change demand, and do these influences increase or…

A: The elasticity of demand is the reaction of demand due to change in price of goods and services,…

Q: According to Marshall, the basis of consumer surplus is Law of diminishing MU

A: To find : What is basis of consumer surplus.

Q: Why would we see a decrease in demand for certain goods if incomes are rising in an economy? Веcause…

A: The marginal propensity to consume refers to the proportion of increment in income one spends on…

Q: Jane has the utility function U(x,y) = x(y+3). The price of x is 2₺ and the price of y is 1₺. Income…

A:

Q: Explain the difference between complement goods and subsitute goods and give an example of…

A: Good A and B are complementary goods if they are consumed together.  For e. G, shoes and socks Pen…

Q: The demand for apples is more price-elastic than the demand for fruit as a whole. This is best…

A: The answer is - C.  There are more substitutes for apples than for fruit as a whole.

Q: a consumer of two goods, either 1 or 2, has a utility function u (X1, X2) = X1 0.6. X2 0.4, where X1…

A: A consumer maximizes utility by consuming a bundle where slope of indifference curve is equal to…

Q: How do changes in income affect the demand for a good? Also show your answer with a graph.

A: A consumer's desire to buy goods and services, as well as their readiness to pay a price for such…

Q: Giffen good

A: ‘Inferior goods (IG)’ are those whose demand falls when income of the consumer rises or vice-versa.…

Q: Assume coke and diet coke are substitutes for consumers. What would happen to the  equilibrium…

A:

Q: Explain, with reasons supported by clear explanations, why merit goods are said to be under-consumed…

A: first of all merit goods are such goods which are very much necessary for  the development of the…

Q: Do you agree or disagree with each of the following statements? Briefly explain your answers and…

A: (a) The price of coffee rises, hence the demand for coffee falls. If the demand for sugar falls…

Q: Which of the following most appropriately illustrates the law of demand? Select one: a.households…

A: Law of demand states that as the price of the good falls its demand rises and vice versa. The law of…

Q: Draw a demand curve for cars. What happens to it in each of the following scenarios? Why? 1. Car…

A: The demand curve shows the relationship between quantity demanded and the price of the good. The law…

Q: Study the type of goods given below and select the one that is not an exception to law of demand. a.…

A: Law of demand - other things being constant, there is inverse relationship between price and…

Q: Why do we need to assume other things equal (constant) when justifying the law of demand? Explain in…

A: Let's first learn about the law of demand. The law of demand states the relationship between price…

Q: Suppose the price of muffins decreases. (Assume that people regard donuts and muffins as…

A: When two or more goods can be interchangeably consumed, they act as substitutes for each other. The…

Q: Suppose the demand for good X is given by Qdx = 20 - 6Px + Py + M. The price of good X is $5, the…

A: In economics, income is the amount of cash that someone or corporation earns with the aid of using…

Q: To which side shifts the demand curve for flowers if there is the woman’s (or mother’s) day? Draw…

A: Demand curve represents the relationship between price and quantity demanded through a graph.

Q: The rules of politics are not always the same as the rules of economics. In discussions about…

A: It involves fighting against cuts in the budget by shifting cuts, to the most popular(visible)…

Q: f an increase in income leads to an increase in the demand for sushi, then sushi is a normal good. a…

A: The demand curve shows the association between the amounts of commodity demanded by the consumer at…

Q: Is the following true: ‘the market demand function of a good will only be upward sloping if the good…

A: There are different types of goods sold on the consumer market. These goods include normal goods,…

Q: Discuss it in your own understanding and then give example each of the following: Consumer and…

A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Give an example of substitute pair and an example of complement pair that you have encountered and…

A: The law of demand establishes the inverse relation between the price and quantity demanded, keeping…

Q: For the following statements, please indicate whether each is true or false: A fall in the…

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

Q: Describe how each of the following will affect the demand for personal computers: a. A rise in…

A: a. The income of the consumer is an important factor that determines the demand for the commodity in…

Q: What are the examples of complement and substitute goods, where a change in price of one good would…

A: The market demand for a commodity shifts as a result of a change in consumer income, their tasted,…

Q: explain how utility analysis leads to the law of demand.

A: Demand is a economic rule alluding to a buyer's wants for a specific item or administration. Utility…

Q: Suppose a consumer has utility function U(x, y) = vx + Jy a. Solve the utility maximization problem…

A: We are going to use Consumer choice theory to answer these questions. Note: Since your question…

Q: All goods, normal or inferior, satisfy the Law of Demand. Justify and explain.

A: The demand and supply model is used to determine the equilibrium price of a good. The market forces…

Q: Which of the following statements are true and which are false? e. Goods and services have utility…

A: Demand represents the desire of a customer to buy goods and services and the willingness to pay a…

Q: Summer break is approaching! Suppose you derive utility from days spent traveling on vacation…

A: Utility function over these two goods; U(D,F)= 4D0.25F0.75 Budget constraint; I(D,F)= PdD+ PfF D=…

Q: As the term is used in economics, rationality implies that a consumer will a. seek to maximize his…

A: Economics refers to the science that studies the behavior of the rational people in response to the…

Q: True/False? Briefly explain. Assume good x is a normal good. In terms of consumer behavior, a cash…

A: Here, it is given that the good x is a normal good and an individual gets two different types of…

Q: Explain how an increase in income would affect demand for an inferior good and explain why giving an…

A: Inferior goods are those goods whose demand falls as the consumer's income rises.

Q: What is meant by the term autarky in the field of economics. Please answer from an economics point…

A: The many rules and regulations that make up the economy are referred to as the economic…

Q: or Sara, ramen noodles are a normal good, however Sean considers ramen noodles to be inferior. If…

A: The measure that depicts the percentage change in quantity being demanded for a good with respect to…

Q: Which of the following will not cause a good’s entire demand curve to shift? Group of answer…

A: A demand curve is a line that provides information about the behavior of demand-side participants…