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Q)
When the income of buyers of good X rises the
a) may rise or fall.
b) falls
c) rises
d) stay the same
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- If electric cars and solar panels are complementary goods, an increase in the price of solar panels will _____________ the demand for electric cars. Group of answer choices decrease increase not affect None of the other three answersAssume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U= X2Y 2 , derive the Hicksian demand function for good Y.Suppose the price of good X decreases. The new consumer equilibrium level of good X will be: higher than before the price change. lower than before the price change. indeterminate without more information. the same as before the price change.
- If a 5 percent decrease in the price of Good A results in an increase of 8 percent in the quantity demanded of Good B, then it can be concluded that Goods A and B areQuestion 2 True or False Provide a brief explanation For the Cobb-Douglas utility function the optimal choice of good i is independent of the price of good j. Full explain this question very fastSuppose income increases. then Question 10 options: a) demand increases for all goods b) supply increases for all goods c) demand increases for normal goods and decreases for inferior goods d) all of the above depending upon the circumstance
- Which of the ff. is correct with regards to the demand curve? A. If the price of the good increases, the demand curve for the good will shift to the left B. If the price of the good increases, the consumers have the incentive to look for substitutes, thus, the quantity demanded and its price are inversely related C. Income of the consumers is written on the vertical axis D. Varying preferences of the consumers is reflected in the demand curve and is written on the horizontal axisQ1.14 Utility from consuming a good is understood by economists to mean; (a) how often we consume the good.(b) how much satisfaction or benefit we get from consuming the good.(c) how much it costs to buy the good.(d) how we best use the good. Q.1.15 The marginal utility of a good or service declines as one more unit is consumedbecause:(a) supply slopes upwards.(b) consumers are constrained by income.(c) of the law of diminishing marginal utility.(d) prices move with demand.Suppose people buy more of good A when the price of good B rises. These goods are: substitutes compliments inferior Normal
- David's utility function for good X and Y is given by U (X,Y) =X2y3. Where px,py and I are the price of good X, price of good Y and consumer income respectively. E). Suppose david faces a new utility such as U(X, Y)=25x0.2 Y0.75 for consuming commodity X and Y, redo question b and c. Derive the demand function for good X and Y What combination of X and Y maximizes the consumer at I=100,px=4,and py=5 F). Suppose david faces another new utility function such as U (X, Y) =15xy2 for consuming commodity X and Y,redo question b and c Derive the demand function for good X and Y What combination of X and Y maximizes the consumer at I=100,px=4,and py=5If the price and quantity for a normal good, Good A, is $7 and 5 units at the original equilibrium, what is one possibility for the new equilibrium of Good A if we see income increase and all other factors stay constant? Choose 1 below. $6 and 4 units $6 and 6 units $8 and 0 units $8 and 6 units $8 and 4 unitsConsider an individual with preferences over two goods. This consumer is maximising utility when: a.They receive the same utility from each good. b.They spend the same amount of money on each good. c.The MRS is greater than the ratio of the prices of the two goods. d.None of the above.