Number of cassette tapes per month Mark's budget constraint is AB. It would pivot to AC if the price of Select one: O a. CDs increased. O b. CDs decreased. C. cassette tapes decreased. O d. cassette tapes increased. Number of CDs per month
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A: Relative price of the good is the ratio of price of the good itself and price of other good.
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A: here we find the answer of the given question as follow;
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Q: What happens to the graph of a budget constraint if there is a 10% increase in prices, and wages…
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Q: a. Andre has a salary of $1000. He spends his entire budget on shoes and beers. The cost for a pair…
A: The budget constraint shows all the different combinations of two goods that an individual is able…
Q: 4. The total effect of a price change of a commodity is А. Sustitution effect plus price effect B. O…
A: "Correct option is B- substitution effect plus income effect."
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- What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?c.Define a budget line d.Given that Tebogo's income is P1800 price of food is P30 and price of entertainment is P40, Draw tebogos budget line. e.Using a diagram, show waht would happen to Tebogo,s budget line if income increases from P1800 to P2100 while prices remain P330 for food and P40 for entrtainment. f.Using a diagram, show what would happen to Tebogo's budget line if income increases from P1800 to P2100 while prices remain P30 for food and P40 for entertainment.
- . It is a hot day, and Bert is thirsty. Here is the value heplaces on each bottle of water:Value of first bottle $7Value of second bottle $5Value of third bottle $3Value of fourth bottle $1a. From this information, derive Bert’s demandschedule. Graph his demand curve for bottledwater.b. If the price of a bottle of water is $4, how manybottles does Bert buy? How much consumersurplus does Bert get from his purchases? ShowBert’s consumer surplus in your graph.c. If the price falls to $2, how does quantitydemanded change? How does Bert’s consumersurplus change? Show these changes in yourgraph.The amount/limit of income a consumer has to spend on goods and services is known as O a budget constraint. wealth. O purchasing power. effective demand.INT BU BIC CH MU AG RA ations allery ia alytics D Question 11 Figure 3-1 Price 0 O A to B. OB to A. Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from O D₁ to D2. B O D2 to D1. D₂ Demand, D₁ Quantity
- Mega Partner is selling two products Marker(m) and Eraser(e) and their budget is given with thefollowing equation: 15Qe+ 30Qm= 3000. Now answer the following questions. I. Draw the budget line for Mega PartnerII. What would be the highest amount spend on Marker with the existing budgetIII. If Total budget increases to 4500 what would be the new budget line (use diagram)IV. If Price of the Marker becomes 15, how this changes the existing budget line keeping allthe values remain same.9. Consider the market for SUVs. a. Start in Equilibrium (be sure to label all relevant points) b. Change at least one of the ceteris paribus conditions. Now consider the market for SUVs if a hurricane hits in the gulf region, damaging some of the oil platforms and oil refineries in the region. c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________ d. Identify the change(s) in direction, and draw into the above market. e. Finish in equilibrium. What are the effects on price and quantity?True or False explain 2. A consumer’s budget line is kinked towards the origin (i.e., the kink is pointing towards the origin) if this consumer faces a lower price per unit of x as more x is consumed.
- 5. Consider a consumer whose utility function isu(x,y) = sqrt(xy) (MRS(x,y)=y/x)a. Assume the consumer has income $120 and initially faces the prices px = $1 and py = $1. Howmuch x and y would they buy? Draw the budget constraint and the demands. b. Next, suppose the price of x were to increase to $2. How much would they buy now? Draw thisin the same figure.c. Decompose the total effect of the price change on demand for x into the substitution effect and theincome effect. That is, determine precisely how much of the change is due to each of thecomponent effects. (Hint: See the lecture notes for the two properties that determine the locationof “z”, the reference point for distinguishing the income and substitution effects.)a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese meals and use the utility maximization conditions to find the demand for Vietnamese food of the typical consumer (keep in mind that since utility is quasi-linear, you can find demand without information about the consumer’s weekly budget). b) Sum across consumers to find the weekly market demand for Vietnamese meals in NYC.12. Refer to Figure 3. The slope of budget constraint AC is Select one: a. -0.5 b. -5.0 c. indeterminate from this information because prices are not given. d. -2.0
