Suppose that the price of commodity Y is $2 per unit while the price of  commodity X is $4 per unit and suppose that an individual’s money income is $100 per time period and is all spent on X and Y. Draw the budget constraint line for this consumer at the initial point.       2.If the price of Y decreases to $3, incorporate BL2 showing change in the Budget line.

Q: Anna is a Vancouverite who starts off her day drinking either a coffee or a bubble tea. From her…

A: Given data: The total income = P15 The price of coffee = P1 The price of bubble tea = P1

Q: Assuming the two good case.  When a person is attempting to maximize utility and the price of one of…

A: A budget constraint is  combination of two goods which are available for the consumer at market…

Q: Suppose that the price of commodity Y is $ 20 per unit while the price of commodity X is $ 15 per…

A: The consumer would always want to maximum amount of the goods and services given the budget income.…

Q: Suppose the price of a dress increases to $200 and income decreases to $4200. What is the new…

A: Budget line is a locus of all possible combination of two goods on which consumer spends his entire…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: We are going to solve for utility maximization in case of perfect complements to answer this…

Q: Suppose that initially, bread is $2 per loaf, and cake is $2 per slice. Marie Antoinette has $18 to…

A: The substitution effect is given by the change in consumption of bread between the initial and…

Q: You run a foundation that provides help to families during the holiday season. You distribute both…

A: Budget line shows various combination of 2 goods that a person can buy, given the prices of the…

Q: Assume that a consumer has a given budget or income of $10 and that she can buy only two goods,…

A: In the mentioned question we have been asked about the slope of the budget as the given consumer…

Q: 1. X1 and x2. The price of x, is $80 per unit and the price of x2 is $40 per unit; x1 and x2 are…

A: Disclaimer :- As you posted multipart questions we are supposed to solve the first 3 questions only…

Q: What if there is a situation with two goods and an income of b>0. How does the lump sum ta T which…

A: The lump sum tax is tax which is imposed on consumer's income irrespective of market and consumer's…

Q: What do you understand by price line and budget line? Assuming that a consumer has a monthly income…

A: Budget Line(BL) shows all of the possible combinations of two goods that a consumer can purchase,…

Q: Emi’s available income each week for expenditures on food (F) and clothing (C) is $40. The price of…

A: 1)Within Emis consumption possibilities 5*2=10 3*10=30 10+30=40 It would lie on her budget line.

Q: consider your decision about how many hours to work. draw your budget constraint assuming that you…

A: Budget constraint is defined as the possible combination of goods and services that is purchased at…

Q: Cathy has $240 to spend on cherry and/or coconuts. Suppose you have drawn her budget line for cherry…

A: Budget line shows different combinations of two goods that can be bought with the given level of…

Q: Andre has a salary of $1000. He spends his entire budget on shoes and beers.  The cost for a pair of…

A: Note: Since you have posted multiple independent questions in the same request, we will solve the…

Q: Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF =…

A:

Q: Suppose that the price of commodity Y is $ 20 per unit while the price of commodity X is $ 15 per…

A: When economic agents take part in the production process, in exchange for labour, they get an…

Q: A consumer has $300 to spend on goods X and Y. The market prices of these two goods are Px = $15 and…

A: (1) A budget constraint is an economic word that refers to the total amount of products you can…

Q: _C= F. Suppose as Case 1, Total income is $100 and per unit prices of Food (F) and Cloth (C) are $2…

A: The utility maximization condition:                                        MRSxy = Px/Py

Q: Now suppose Henry has $900 to spend rather than $450. How will this change affect Henry's budget…

A: A straight line with a slope that shows a downwards figure and involves all the possible…

Q: ity = XY + 3X. If prices of X and Y are Birr 4 and Birr 2 respectively; and if a consumer has an…

A: Utility refers to the satisfaction. The aim of the consumer is to maximize the utility given the…

Q: Natalie is always willing to give up 10 ounces of licorice for 1 ounce of chocolate. Mitchell, on…

A: In economics, rational choice theory states that once humans are given with numerous choices…

Q: In the figure below, a consumer is initially in equilibrium at point C. The consumer’s income is…

A: The budget line represents different combinations of two commodities that a consumer can purchase…

Q: Jean's initial budget constraint L', optimal consumption bundle e, , and level of utility i' are…

A: *Answer:

Q: Bottles of water sell for 1 euro and slices of chocolate cake sells for 3 euros. Suppose Jack, whose…

A: The indifference curve illustrates the combinations of two goods that will give the same amount of…

Q: Suppose you have $30 and you are going to rent some movies and buy some sodas.  Suppose movie…

A: Budget line: $30 = $6 x M + $1 x S  where M: Movies and S: Soda 30 = 6M + S When M = 0, S = 30…

Q: Decompose the overall effect on the change in the optimal bundle into income effect and substitution…

A: Meaning of Income Effect: The term income effect refers to the situation under which the consumer…

Q: draw the budget constraint for a person with income of $ 1000 if the price of pepsi is $5 and the…

A: A budget constraint is a term used in economics to describe all of the different combinations of…

Q: Breakdown the shift from the original point of consumption to the new point of consumption using the…

A: The income effect measures the change in quantity consumed due to the change in the purchasing power…

Q: Please show all working so I can understand the process. Mrs. Griffiths earns $5000 a week and…

A: Answer (i) Explanation: Income = $5000 dresses = $25 each handbags = $14 each We can denote and…

Q: ottles of water sell for 1 euro and slices of chocolate cake sells for 5 euros. Suppose Jack, whose…

A: The indifference curve refers to the curve that shows the combinations of two goods that will give…

Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…

A: Mrs. Griffith's income = $5000 She buys two commodities - dress (D) and handbag(H)

Q: Mary has two dinner options available: eating a home cooked meal for $150 per meal, or at a…

A:

Q: Examine the graph below to answer the following question regarding "substitution and income effects"…

A: The budget line is a straight line that shows the possible attainable combination of two goods that…

Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…

A: Marginal rate of substitution is the ration of marginal utilities of both product.

Q: 女 %24 50 30 DINER BREAKFASTS 9. Income and substitution effects Hubert and Kate Juarez live in San…

A: Answer is given in step 2

Q: If the consumer respects his budget constraint, he can purchase any commodity bundle ___.   a. above…

A: The consumers are considered to be the buyers, who purchase goods, and services which are sold by…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: A perfect complement is a good that must be consumed with another good. The indifference curve of a…

Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…

A: Budget constraint shows the different feasible combination of two goods that can be attained by…

Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…

A: PLEASE NOTE AS PER THE BARTLEYBY POLICY I AM SOLVING FIRST THREE SUB PARTS. PLEASE POST OTHER PARTS…

Q: Matt has $13 in income that he devotes entirely towards caffeine purchases, specifically coffee and…

A: let X1 be tea and X2 be coffee and given that income increases from m1 = $13 to $40 so, Tea  - P1 =…

Q: Suppose the price of product X is Rs.500 and the price of product Y is Rs.1000 and one of a family…

A: Definition Budget line: It is a locus of points which shows all the possible combinations of the two…

Q: Lorena uses her income to consume two goods. Originally, she was consuming at point (a), but then…

A: Lorena uses her income to consume two goods.

Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.