can you please solve d and e 13.We're stilling thinking about Douglas. No matter what your answerswere to question 12 above, assume Douglas Cornfield's demand function for good 1 isx₁ (P₁, P2, m) = 2m/5p₁. His income is $1,000, the price of good 1 is $5, and the priceof good 2 is $20.How much of good 1 does Doug demand?When the price of good 1 falls to $4, how much of it does Doug demand now?If his income were to change at the same time so that he could exactly affordhis old bundle at the new prices, what would be his demand for good 1 at thisnew level of income?(d) What is the change in Doug's demand for good 1 due to the SubstitutionEffect?What is the change in Doug's demand for good 1 due to the Income Effect?Solution: a) 80. b) 100. c) 92. d) 80 to 92. e) 92 to 100.

Consumer theory examines how individuals and households make purchasing decisions by taking their…

stilling inking glas. wers were to question 12 above, assume Douglas Cornfield's demand function for good 1 is x₁ (P₁, P2, m) = 2m/5p₁. His income is $1,000, the price of good 1 is $5, and the price of good 2 is $20. (a) How much of good 1 does Doug demand? (b) When the price of good 1 falls to $4, how much of it does Doug demand now? (c) If his income were to change at the same time so that he could exactly afford his old bundle at the new prices, what would be his demand for good 1 at this new level of income? (d) (e) What is the change in Doug's demand for good 1 due to the Substitution Effect? What is the change in Doug's demand for good 1 due to the Income Effect?

stilling inking glas. wers were to question 12 above, assume Douglas Cornfield's demand function for good 1 is x₁ (P₁, P2, m) = 2m/5p₁. His income is $1,000, the price of good 1 is $5, and the price of good 2 is $20. (a) How much of good 1 does Doug demand? (b) When the price of good 1 falls to $4, how much of it does Doug demand now? (c) If his income were to change at the same time so that he could exactly afford his old bundle at the new prices, what would be his demand for good 1 at this new level of income? (d) (e) What is the change in Doug's demand for good 1 due to the Substitution Effect? What is the change in Doug's demand for good 1 due to the Income Effect?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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