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Suppose that in Zambia, people consume only two goods, peas and beans. Suppose that John, a citizen in that country has an income of ZMW10, the price of beans is 20N per kg and the price of peas is 40N per kg.
- Suppose that John consumes 30 kg of beans. Assume that he wants to spend all his income, how many kg of peas is he going to consume?
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- Suppose that in Zambia, people consume only two goods, peas and beans. Suppose that John, a citizen in that country has an income of ZMW10, the price of beans is 20N per kg and the price of peas is 40N per kg. Suppose that John consumes 30 kg of beans. Assume that he wants to spend all his income, how many kg of peas is he going to consume? Assume that the price of peas falls from 40N to 20N. Assuming that John still consumes 30kg of beans, find the new quantity of peas. After the decrease in the price of peas to 20N, assume that Jonh is just as well off as he was in (a) if he has an income of ZMW7.6. However, with that income and the new price of peas he would have consumed 20 kg of beans. Find the quantity of peas he would have consumed in this case. Find the substitution effect on consumption of peas due to the decrease in the price of peas in (c). Find the income effect on consumption of peas due to the decrease in income in (c). Question d and e to be solvedAkua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. (a) Assuming that Yoghurt and Bread are compliments for Akua, construct the equation for Akua’s Budget Line for her to consume all her income of GHS 400. (b) What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?Given the significant increases in the cost of living in Canada (and elsewhere), Governments (both Federal and Provincial) have been under pressure to provide financial support to at last individuals or households. This financial support can be in the form of direct payments (income) to individuals or subsidizing the purchase of certain goods (i.e. the government pays a portion of the purchase price). To keep things simple, let’s only consider our standard example in which the individual consumes food and clothing; and food is the good whose purchase is to be subsidized. a) Evaluate the impact of both of these options on the utility of the individuals receiving support. (40%) b) Suppose the government only subsidizes the purchase of the first 5 units of food, how does this change your answer to a)? (40%) c) If the government ends up spending the same amount of total subsidies in either case (income support or price subsidy), which option will have a more substantial effect on the…
- Research shows that in countries where incomes are high and continue to exhibit an increasing trend, couples decide to have less children. Children are regarded as a/an _______________ goodAssume that a college student spends her income on books and pizza. The price of a pizza is $8.00, and the price of a book is $15. If she has $100 of income, she could choose to consumeQuestion 34 Stephanos spends all of his $500 allowance on slices of pizza and gas for his pickup truck. He spends eighty percent of this on pizza and the rest on gas. Because of a shortage of gas, the price of gas increases by 40%. This makes his consumption of gas (measured in gallons) fall by 20%. If he keeps spending all his money on pizza and gas, what is the percentage change in his consumption of pizza (measured in slices)? does not change 2% increase 3% decrease 4% increase 1% decrease
- Ehh and Mol can produce bread and butter. Suppose That Ehh can produce 40 breads per minute, while Mol can produce 30. Alternatively, Ehh can produce 10 butters per minute, while Mol can produce 5. Assume that Ehh and Mol specialize only one of the goods. Based only this information. For Ehh and Mol t consume the greatest amount of bread and butter, Ehh should specialize in producing ________because he has an ________advantage in /their production.Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves. a. Given this information, construct the equation for Akua’s Budget Line. c. Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10? d. Assume that prices are the same as used in part a. If the marginal utility of a Yoghurt is 20, what is the marginal utility of Bread if she is maximizing her utility? e. Now assume that Yoghurt and Bread are compliments for Akua. For her to consume all her income of GHS 400, and the prices used in part a. What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?If households spend $80 billion on goods and $70 billion on services, how much in revenues do businesses receive in the product market?
- Suppose that the price of oranges is $1 per unit and the price of pencils is $70 per unit. In addition, suppose that your income is $1900. If you spend all your money on oranges, how many oranges can you buy? 1900 orangesB5. I. Suppose a typical Australian household purchases three goods, creatively named good A, good B, good C. The prices of these goods includes, a. If the typical household purchases two units of each good, what was the percentage increase in the price paid by the household for this basket among 2011 and 2012. b. If the typical household purchases 10 units of good B and 2 units of both good A and good C, what was the percentage increase in the price paid by the household for this basket. c. Given answers to a and b, what is the relationship between the market basket and the percentage price change.A short article in the January 10, 2011 edition of The New York Times discussed the amount spent on DVDs over the past six years: (In 2004) consumers spent about $21.8billion to rent and and buy DVDs, Blu-ray discs, digital downloads and other forms of home entertainment...The number has fallen every year since, for a total drop of about 13.8 percent, to $18.8 billion in 2010. The reporter noted that the actual drop was about double what it seemed to be when the figures were adjusted for inflation: $21.8 billion figure from 2004 would amount to $25.3billion in current dollars. The article also noted that box office revenues rose from $9.3billion in 2004 to $10.6 billion in 2010. Calculate the percentage increase in box office revenues, then re-calculate the percentage increase using inflation-adjusted dollars. Have box office revenues increased or decreased over this six-year time period?
