MYECONLAB+ETEXT+KNAPP 104 STUDENT PACKET
6th Edition
ISBN: 9781323477816
Author: HUBBARD/KNAPP
Publisher: PEARSON C
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Question
Chapter 10.A, Problem 5PA
Subpart (a):
To determine
The application of indifference curve and budget constraint.
Subpart (b):
To determine
The application of indifference curve and budget constraint.
Subpart (c):
To determine
The application of indifference curve and budget constraint.
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8. Normal and inferior goods
Larry likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following
diagram shows two of Larry's indifference curves for going to ballgames and symphonies. With Larry's initial budget constraint (BC), he chose to go
to two symphonies and six baseball games per month (point X). Then his budget constraint shifted to BC2, and he chose to go to five symphonies
and five ballgames per month (point Y).
2
BALLGAMES
Z
0
5
10
SYMPHONICS
of the following choices, which could have shifted Larry's budget constraint from BC₁ to BC₂? Check all that apply.
His income increased while the prices of baseball and symphony tickets stayed the same.
The price of symphony tickets increased while his income and the price of baseball tickets stayed the same.
The prices of both baseball and symphony tickets decreased while his income stayed the same.
His income decreased while the prices of baseball and…
8. Normal and inferior goods
Shen likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following
diagram shows two of Shen's Indifference curves for going to ballgames and symphonies. With Shen's initial budget constraint (BC₁), he chose to go
to five symphonies and three baseball games per month (point X). Then his budget constraint shifted to BC₂, and he chose to go to four symphonies
and six ballgames per month (point Y).
BALLGAMES
0
0
5
SYMPHONIES
BC
8
goods.
BC
10
?
of the following choices, which could have shifted Shen's budget constraint from BC, to BC₂? Check all that apply.
The price of baseball tickets Increased while his income and the price of symphony tickets stayed the same.
The prices of both baseball and symphony tickets decreased while his income stayed the same.
His Income increased while the prices of baseball and symphony tickets stayed the same.
His Income decreased while the prices of…
Assume that you only buy two goods, fish and Fanta soda. You are analyzing
your personal consumption for the two goods. Assume that you have a weekly
budget of $80, fish costs $5 per Ib and Fanta costs $2 a soda.
a. Draw your budget line with Fanta on the y-axis. Calculate the x and y
intercepts as well as the slope of the budget line. Include your personal
indifference curve to show your optimal consumption between the two goods
(assume that your indifference curve is such that you consume positive values
of each good).
3. Assume that the price of fish falls from $5 per Ib to $4 per Ib. On a new
graph draw the change in price along with the new intercept(s) and new
optimal consumption point.
Chapter 10 Solutions
MYECONLAB+ETEXT+KNAPP 104 STUDENT PACKET
Ch. 10.A - Prob. 1RQCh. 10.A - Prob. 2RQCh. 10.A - Prob. 3RQCh. 10.A - Prob. 4PACh. 10.A - Prob. 5PACh. 10.A - Prob. 6PACh. 10.A - Prob. 7PACh. 10.A - Prob. 8PACh. 10.A - Prob. 9PACh. 10.A - Prob. 10PA
Ch. 10.A - Prob. 11PACh. 10.A - Prob. 12PACh. 10 - Prob. 10.1.1RQCh. 10 - Prob. 10.1.2RQCh. 10 - Prob. 10.1.3RQCh. 10 - Prob. 10.1.4RQCh. 10 - Prob. 10.1.5PACh. 10 - Prob. 10.1.6PACh. 10 - Prob. 10.1.7PACh. 10 - Prob. 10.1.8PACh. 10 - Prob. 10.1.9PACh. 10 - Prob. 10.1.10PACh. 10 - Prob. 10.1.11PACh. 10 - Prob. 10.1.12PACh. 10 - Prob. 10.2.1RQCh. 10 - Prob. 10.2.2RQCh. 10 - Prob. 10.2.3RQCh. 10 - Prob. 10.2.4PACh. 10 - Prob. 10.2.5PACh. 10 - Prob. 10.2.6PACh. 10 - Prob. 10.2.7PACh. 10 - Prob. 10.2.8PACh. 10 - Prob. 10.2.9PACh. 10 - Prob. 10.2.10PACh. 10 - Prob. 10.2.11PACh. 10 - Prob. 10.3.1RQCh. 10 - Prob. 10.3.2RQCh. 10 - Prob. 10.3.3RQCh. 10 - Prob. 10.3.4PACh. 10 - Prob. 10.3.5PACh. 10 - Prob. 10.3.6PACh. 10 - Prob. 10.3.7PACh. 10 - Prob. 10.3.8PACh. 10 - Prob. 10.3.9PACh. 10 - Prob. 10.4.1RQCh. 10 - Prob. 10.4.2RQCh. 10 - Prob. 10.4.3RQCh. 10 - Prob. 10.4.4RQCh. 10 - Prob. 10.4.5PACh. 10 - Prob. 10.4.6PACh. 10 - Prob. 10.4.7PACh. 10 - Prob. 10.4.8PACh. 10 - Prob. 10.4.9PACh. 10 - Prob. 10.4.10PACh. 10 - Prob. 10.4.11PACh. 10 - Prob. 10.4.12PACh. 10 - Prob. 10.4.13PACh. 10 - Prob. 10.4.14PACh. 10 - Prob. 10.4.15PACh. 10 - Prob. 10.4.16PA
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- 8. Normal and inferior goods Becky likes going to the ballpark to watch baseball, and she also is fond of going to the theater to listen to the symphony orchestra. The following diagram shows two of Becky's indifference curves for going to ballgames and symphonies. With Becky's initial budget constraint (BC₁), she chose to go to four symphonies and four baseball games per month (point X). Then her budget constraint shifted to BC₂, and she chose to go to five symphonies and five ballgames per month (point Y). BALLGAMES 0 4 SYMPHONIES 10 of the following choices, which could have shifted Becky's budget constraint from BC to BC₂? Check all that apply. Her income increased while the prices of baseball and symphony tickets stayed the same. The prices of both baseball and symphony tickets decreased while her income stayed the same. The price of baseball tickets increased while her income and the price of symphony tickets stayed the same. The prices of both baseball and symphony tickets…arrow_forwardIf Joe decides to allocate his entire weekly allowance between energy drinks and coffee, he could afford 9 energy drinks and 3 cups of coffee, or 6 cups of coffee and 2 energy drinks. Suppose a cup of coffee costs £2.80. a) Calculate the price of an energy drink and Joe's weekly allowance. Write down Joe's budget equation and draw the corresponding budget line. Mark the two consumption bundles mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. b) Discuss how Joe's budget set would change if his allowance was reduced by £5.20 a week. Show the relevant changes graphically. How should the price of coffee change so that Joe could still afford to buy 6 cups of coffee and 2 energy drinks? c) Discuss how Joe's budget constraint would change if the government subsidised consumption of coffee by £0.50 per cup of coffee.arrow_forward5. Janice consumes two goods, X and Y. Janice has a utility function given by the expression: U=4X05Y05 and current prices of X and Y are $25 and $50, respectively. Janice currently has an income of 750 unit per time period. a. Write an expression for Janice's budget constraint. b. Calculate the marginal rate of substitution of X for Y. (horizontal line X, vertical line Y). c. Calculate the values of X and Y that will maximize utility. d. Graph your answers (budget line, indifference curve)arrow_forward
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