Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…
A: The budget line shows the alternate combination of two goods which can be purchase given income of…
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Q: The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget…
A: The utility is the amount of satisfaction received from the consumption of a good or service.
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A: Consumer's budget constraint :- It is the inequality cost less than or equal to his income.
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A: Note: There are multiple subparts in the question. We shall solve the first three subparts for you.…
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A: Income = 200 per week Cost of Running Shoes = 20 Cost of Basketball Shorts = 20
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A: Since you have posted multiple questions and not specified which question needs to be solved, we…
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A: Introduction: The budget line depicts all potential combinations of two commodities that a customer…
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A: (1) A budget constraint is an economic word that refers to the total amount of products you can…
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A: Budget line shows all possible combination of two goods that consumer is able to consume when…
Q: Originally the consumer faces the budget line p1x1 + p2x2 = m.What happens to the budget line if the…
A: "Budget is an estimate of earnings and expenses of a household, business or the government. "Budget…
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A: Budget constraint shows combinations of two goods that can be bought with the given level of income.
Q: Suppose the price of beans is increased. Which of the following statements is true? Select one: O a.…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
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A: X-intercept = Income / Price of X Y-intercept = Income / price of Y We can use any of the above two…
Q: Which budget constraint panel in Figure below shows the combined effects of an increase in the price…
A: Budget constraint is said to be a combination of goods that a consumer can purchase with given…
Q: The slope of the budget constraint cannot change unless the budget amount changes. True or False?
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A: A demand constrained framework is one where employment and output in the framework are what they are…
Q: Which of the following statements is true? OThe budget line shows the utility associated with all…
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A: Suppose there are two goods, i.e., X and Y Px is the price of X Py is the price of Y M is income.…
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A: Slope of budget constraint:- Slope of budget constraint is the ratio of the prices of two goods. It…
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A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…
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A: The budget line is a straight line that shows the possible attainable combination of two goods that…
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A: Budget constraint: It shows all the feasible combinations of goods and services that can be…
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Q: Оиestion 4: In Figure below a budget constraint is shown. If PY (the price of good Y) is $6, what is…
A: Budget constraint is a representation of the bundles of goods and services that a consumer can buy…
Q: Suppose that the price of commodity Y is $1 per unit while the price of commodity X is $2 per unit…
A: The budget constraint refers to the combination of two goods that a consumer can buy with the…
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A: Part A: The budget constraint of Individual L is given below: QX×PX+QY×PY=Y 2QX+4QY=40 Part B:…
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A: Given; Price of E= $3 Price of O= $1 Income= $24
Q: Suppose a consumer has a monthly income of m = 100 which she spends on two commodities: french fries…
A: (e) The slope of the budget line is optimal for 2 bundles at different ratios. Thus, it can be…
Q: Suppose the price of an M&M is $2.00, the price of Skittles is $3.00, and the budget is $24. M&Ms…
A: Budget line shows the combinations of two goods that a consumer can purchase at given market price…
Q: Which budget constraint panel in Figure below shows the combined effects of an increase in the price…
A: Changes in prices lead to shift in budget curve If price increases it reduces the purchasing power…
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A: Since, the consumer dislikes the extreme points of consuming only one of the goods, so the…
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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.
Q: John is indifferent between canned soup and fresh soup. Canned soup sells for $1 per serving and…
A: Let's assume C is canned soup and F is fresh soup. John is indifferent between canned soup and…
Q: Which budget constraint panel in Figure below shows the combined effects of an increase in the price…
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A: Answer 3. Marginal Rate of Substitution is the amount of a good that a consumer is willing to…
Q: What is the relationship between an indifference curve and budget constraint?
A: Indifference curve: An indifference curve shows the different combinations of two goods that the…
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A: Answering just the Budget line indifference curve graph as asked.
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- a consumer has income of RM 3,000. Orange Juice costs RM3 glass and chicken rice cost RM6 a palte. Draw the consumers budget constraint and what is the slope of this budget constraint? Draw a consumer's indifference curves for orange juice and chicken rice. describe and explain 4 propeties of these indiffrence curves consider your decision about how many hours to work draw your budget constraint assuming that you pay no taxes on your income. on the same diagram draw another budget constraint assuming that you pay 15 percent tax show how tax might lead to more hours of work, fewer hours or the same number of hours. Explain.Suppose that MUx = 10 and MUy = 20. Further suppose that the consumer’s budgetconstraint can be expressed as 20x + 10y = 400. For this consumer, the optimal amount of good x to buy would be a) 5. b) 0. c) 20. d) 40.In comparing one market basket, A, to others to the northwest or southeast, we can say that a typical consumer will THE NORTHWEST AND SOUTHEAST ARE REFERRING TO THE POINTS ON A BUDGET CONSTRAINT AND INDIFFERENCE CURVE prefer A to any other market basket. prefer any other market basket to A. be indifferent between A and any other market basket in the Northwest or Southeast. be indifferent between some other market baskets in the Northwest or Southeast Only typed answer and don't use chat gpt
- Mrs. Rochester earns $4500 a week and spends her entire income on computers andpastries, since these are the only two items that provide her utility. Furthermore, Mrs.Rochester insists that for every computer she buys, she must also buy a pastry. A) Suppose the price of pastries increases to $20 and income decreases to $3200. Whatis the new algebraic equation for Mrs. Rochester’s budget constraint? Show theimpact of the new budget line relative to the original budget line. B) What would be the new marginal rate of substitution that corresponds to theoptimal consumption choice? Interpret the marginal rate of substitution. D) Assume for this question only that when the price of computers decreases, less ofthat good is demanded. Illustrate the income and substitution effect of this pricedecrease.Explain the consumer's equilibrium within the budget constraint - indifference curve frameworkSuppose a consumer has a monthly income of m = 100 which she spendson two commodities: french fries (x1) and beef jerky (x2). The price offrench fries is p1 = 2 and the price of beef jerky is p2 = 5. (e) What is the slope of the budget line? Provide an economicinterpretation of this number.(f) Because of Mad Cow Disease, the price of beef jerky increasesto $10 (lower supply of beef). On a new graph, plot the originaland new budget constraint clearly identifying how the budgetconstraint has changed. What is the new relative price of beefjerky in terms of french fries?(g) Because of severe shortages, Congress passes the Jerky ReliefAct which limits each consumer to purchase at most 5 packs ofjerky. Show on a graph how this affects the consumer’s budgetset. Answer all three.
- Joe's income is $500, the price of food (F, y-axis) is $2 per unit, and the price ofshelter (S, x-axis) is $100. Which of the following represents his budgetconstraint?a good is normal, then an increase in the price of the good will lead to which of the following to be true for this good? (Assume that there are only two goods, the individual's preferences lead to well-behaved preferences with strictly convex indifference curves and an interior solution for all budgets). Let SE = substitution effect, IE = income effect) (a) The magnitude of the IE for this good must be larger than the magnitude of the SE (b) The magnitude of the SE for this good must be larger than the magnitude of the IE (c) The good could be a Giffen good d) The good must be an ordinary good ( (e) None of the aboveGraph and explain indifference curves for the following situations:(i) An individual has constant marginal utility toconsumption in both periods.(ii) An individual does not derive utility from this period’sconsumption, but does from the next period’sconsumption.(iii) An individual’s utility decreases with consumption inboth periods.
- Draw budget constraint if he has income of Rs. 1000 which he can spend on buying Pizzas and Pepsi cans (Price of a Pizza is Rs.100 and price of a can of Pepsi is Rs.20)Utility Maximization. Suppose that an individual has a utility function given asU =√XYwhere U is the total utility, X is the quantity of good X that is consumed, and Y is the quantity ofgood Y consumed.It follows thatMUxMUy= X/Ywhere MUx is the marginal utility of X and MUy is the marginal utility of Y.The individual’s budget constraint isI = PxX + PyYwhere I is income, Px is the price of good X, and Py is the price of good Y.Suppose that Px = 2, Py = 1, and I = 100. How much of X and Y does this individual purchase?A consumer has income of 15000. Masks costs $35 per mask, and sanitizers cost $70 per bottle. Draw the comsumer's budget constraint ( put mask on the horizontal axis). what is the slope of this budget constraint?
