Suppose that with a budget of $180, Deborah spends $108 on sushi and $72 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. Then, the price of bagels falls to $1 per bagel. Instructions: Enter your answers as a whole number. How many pieces of sushi and how many bagels did Deborah consume before the price change? pieces of sushi and bagels At the new prices, how much money would it have cost Deborah to buy those same quantities (that consumed before the price change)? the quantities that she Given that it used to take Deborah's entire $180 to buy those quantities, how big is the income effect caused by the lower price of bagels? 2$

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
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Suppose that with a budget of $180, Deborah spends $108 on sushi and $72 on bagels when sushi costs $2 per piece and bagels cost
$2 per bagel. Then, the price of bagels falls to $1 per bagel.
Instructions: Enter your answers as a whole number.
How many pieces of sushi and how many bagels did Deborah consume before the price change?
pieces of sushi and
|bagels
At the new prices, how much money would it have cost Deborah to buy those same quantities (that is, the quantities that she
consumed before the price change)?
Given that it used to take Deborah's entire $180 to buy those quantities, how big is the income effect caused by the lower price of
bagels?
%24
Transcribed Image Text:Suppose that with a budget of $180, Deborah spends $108 on sushi and $72 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. Then, the price of bagels falls to $1 per bagel. Instructions: Enter your answers as a whole number. How many pieces of sushi and how many bagels did Deborah consume before the price change? pieces of sushi and |bagels At the new prices, how much money would it have cost Deborah to buy those same quantities (that is, the quantities that she consumed before the price change)? Given that it used to take Deborah's entire $180 to buy those quantities, how big is the income effect caused by the lower price of bagels? %24
You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table.
Units of X
MUX
Units of Y
MUy
1
23
18
2
16
16
3
12
3
14
4
8.
4
10
5
4
5
8
4
Instructions: Enter your answers as a whole number.
a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, respectively, what quantities of each will you purchase to
maximize utility?
units of X and
units of Y
b. What total utility will you realize?
utils
C. Assume that, other things remaining unchanged, the price of X falls to $2.00. What quantities of X and Y will you now purchase?
units of X and
units of Y
d. Using the two prices and quantities for X, complete the table to derive the derived demand schedule (a table showing prices and
quantities demanded) for X.
Instructions: Start with the highest price first
Price of X
Quantity Demanded of X
$
$
Transcribed Image Text:You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table. Units of X MUX Units of Y MUy 1 23 18 2 16 16 3 12 3 14 4 8. 4 10 5 4 5 8 4 Instructions: Enter your answers as a whole number. a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, respectively, what quantities of each will you purchase to maximize utility? units of X and units of Y b. What total utility will you realize? utils C. Assume that, other things remaining unchanged, the price of X falls to $2.00. What quantities of X and Y will you now purchase? units of X and units of Y d. Using the two prices and quantities for X, complete the table to derive the derived demand schedule (a table showing prices and quantities demanded) for X. Instructions: Start with the highest price first Price of X Quantity Demanded of X $ $
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