In the following figure, a consumer is initially in equilibrium at point C. The consumer's income is Rs.400, and the budget line through point Cis given by Rs.400 = Rs.100X + Rs.200Y. When the consumer is given a Rs.100 gift certificate that is good only at store X, she moves to a new equilibrium at point D. a. Determine the prices of goods X and Y. 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. Based on this consumer's preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. Prodact YA
In the following figure, a consumer is initially in equilibrium at point C. The consumer's income is Rs.400, and the budget line through point Cis given by Rs.400 = Rs.100X + Rs.200Y. When the consumer is given a Rs.100 gift certificate that is good only at store X, she moves to a new equilibrium at point D. a. Determine the prices of goods X and Y. 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. Based on this consumer's preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. Prodact YA
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 10SQ
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ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning