Principles of Microeconomics California Edition 2nd Edition
2nd Edition
ISBN: 9780393622089
Author: Dirk Mateer, Lee Coppock
Publisher: W. W. Norton
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Chapter 16, Problem 5SP
To determine
Calculate the consumer optimum if the price increases.
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Suppose a person allocates a given budget between food and clothing. If food is an inferior good can you tell whether clothing is inferior or normal? Explain.
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Chapter 16 Solutions
Principles of Microeconomics California Edition 2nd Edition
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- Suppose you have a budget of $12 and cost of a cola is $2 and sandwich is $4. Using this information form the table, how many sandwiches and cola would you buy at the optimum?arrow_forwardUsing the consumer choice theory, explain how an individual decides what combination of different products to buy?arrow_forwardA consumer has a choice of spending $20,000 on a Honda or $14,000 on a Kia. She was observed buying a Kia during the weekend. Does this mean the consumer prefers the Kia to the Honda? Explain your answerarrow_forward
- Using the consumer choice theory, explain how an individual decides how to adjust her preferred combination of different products to buy when the price of just one product changes ?arrow_forwardSuppose John decides to buy 4 units of food and 4 units of clothing with his $12 budget. Would his marginal utility per dollar spent on food be greater than or less than his marginal utility per dollar spent on clothing? What does this tell you about how he should substitute food for clothing if he wanted to increase his utility without spending any more money?arrow_forwardThe principle of diminishing marginal utility says that people don't enjoy consuming more of a good. True or False and Explain the choicearrow_forward
- How a price change affects consumer optimum?arrow_forwardFive consumers have the following marginal utility of apples and pears The price of an apple is $1, and the price of a pear is $2.Which, if any, of these consumers are optimizing over their choice of fruit? For those who are not, how should they change their spending?arrow_forwardQ1. You have Rs.10. The price of samosa is Rs.1 per unit. The price of a steak sandwich is Rs.3 The utility received from consuming samosa and steak is given below. a. How many samosas and steak sandwiches should be bought to maximize utility? Calculate utility maximizing quantities of samosas and steak sandwiches when income equals Rs.10 and the price of beer is Rs.1 and the price of steak sandwiches is Rs.3 using the utility b. maximizing rule No. of TU of samosa MU of No. of steaks TU of steaks MU of steaks samosas samosa 1 15 1 24 2 24 45 32 63 4 39 4 75 45 84 47 87arrow_forward
- The graph shows the budget line for a consumer who only buys cookies and magazines. If the consumer's income is $20, what is the price of a Magazine? 24 20 16 4 2 4 6 8 10 12 Magazines (number per week) dollar(s) Cookies (number per week)arrow_forwardhow do I illustrate an increase in a price of an item resulting in consumers buying another itemarrow_forwardPrice for X is $1 and Y is $2. Budget is $9. Good X Good Y Quantity Marginal Utility Quantity Marginal Utility 1 8 1 10 2 7 2 8 3 6 3 6 4 5 4 4 5 4 5 3 6 3 6 2 7 2 7 1 When the consumer purchases the utility-maximizing combination of goods X and Y, total utility will be what?arrow_forward
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