In the below figure, a consumer is initially in équilibrium at point C. The consumer's income is $600, and the budget line through point C is given by $600 - $150X+$300Y. When the consumer is given a $150 gift certificate that is good only at store X, she moves to a new equilibrium at point D. Product Y Product X a. Determine the prices of goods X and Y.
In the below figure, a consumer is initially in équilibrium at point C. The consumer's income is $600, and the budget line through point C is given by $600 - $150X+$300Y. When the consumer is given a $150 gift certificate that is good only at store X, she moves to a new equilibrium at point D. Product Y Product X a. Determine the prices of goods X and Y.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 15SQ
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Transcribed Image Text:In the below figure, a consumer is initially in équilibrium at point C. The consumer's income is $600, and the budget line through point
C is given by $600 - $150X+$300Y. When the consumer is given a $150 gift certificate that is good only at store X, she moves to a
new equilibrium at point D.
Product Y
Product X
a. Determine the prices of goods X and Y.
Transcribed Image Text:a. Determine the prices of goods X and Y.
Price of X: $
150
Price of Y: $[
300
b. How many units of product Y could be purchased at point A?
c. How many units of product X could be purchased at point E?
d. How many units of product X could be purchased at point B?
e. How many units of product X could be purchased at point F?
f. Based on this consumer's preferences, rank bundles A, B, C, and D in order from most preferred to least preferred.
D.C.A.B
:
g. Is product X a normal or an inferior good?
Normal
#
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