Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305135444
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 21, Problem 4CQQ
To determine
The impact of increased income on normal and inferior goods.
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Q.2 Which two pairs of goods likely have a relatively weak negative cross price elasticity for most people?
Select one:
a. Peanut butter and computers.
b. Sprite and Coca Cola.
c. Sausages and ketchup.
d. Beef and fish.
e. chocolate milk and skim milk.
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Chapter 21 Solutions
Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
Ch. 21.1 - Prob. 1QQCh. 21.2 - Prob. 2QQCh. 21.3 - Prob. 3QQCh. 21.4 - Prob. 4QQCh. 21 - Prob. 1CQQCh. 21 - Prob. 2CQQCh. 21 - Prob. 3CQQCh. 21 - Prob. 4CQQCh. 21 - Prob. 5CQQCh. 21 - Prob. 6CQQ
Ch. 21 - Prob. 1QRCh. 21 - Prob. 2QRCh. 21 - Prob. 3QRCh. 21 - Prob. 4QRCh. 21 - Prob. 5QRCh. 21 - Prob. 6QRCh. 21 - Prob. 7QRCh. 21 - Prob. 1PACh. 21 - Prob. 2PACh. 21 - Prob. 3PACh. 21 - Prob. 4PACh. 21 - Prob. 5PACh. 21 - Prob. 6PACh. 21 - Prob. 7PACh. 21 - Prob. 8PACh. 21 - Prob. 9PACh. 21 - Prob. 10PACh. 21 - Prob. 11PACh. 21 - Prob. 12PACh. 21 - Prob. 13PA
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- Mary makes the following choices of X1 and X2 when prices and income are as follows: X1 X2 P1 P2 I Week 1 10 20 2 1 40 Week 2 6 14 2 2 40 A. Mary considers both goods to be normal goods B. We cannot say whether Mary thinks the goods are normal or inferior. C. X1 is a normal good and X2 is an inferior good for Mary D. X1 is an inferior good and X2 is a normal for Mary Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardMaria graduates from college and her income increases by $45,000. Nothing else changes. Maria decreases the quantity of donuts and pretzels that she buys and increases the quantity of ski trips that she buys. How would Maria describe these goods? For Maria, A. donuts and ski trips have become substitutes B. ski trips and pretzels are normal goods C. donuts and pretzels have become complements OD. ski trips are normal goodsarrow_forward Select one: a. a decrease in the price of 7-UP, assuming 7-UP is a substitute for Dr. Pepper b. an increase in the price of sugar used to make Dr. Pepper c. an increase in the price of Dr. Pepper d. an increase in income, assuming that Dr. Pepper is a normal goodarrow_forward
- 3) For Nour doughnuts and muffins are perfect substitutes. Doughnuts are £4 a box and muffins are £3 a box. The boxes hold equal numbers. Nour has budgeted £48 a month to spend on these sweets. Which of the following is correct? (a) Nour will buy 12 boxes of doughnuts and no muffins per month. (b) Nour will buy 6 boxes of doughnuts and 8 boxes of muffins per month. (c) Nour will buy no doughnuts and 16 boxes of muffins per month . (d) From this information it cannot be determined how many muffins or doughnuts Nour will buy because the marginal utilities for muffins and doughnuts are not given. 4) The supply of sugar is given by Q, = -50 + 1/2 P. Determine the arc price elasticity of supply between Q = 40 and Q = 100. (a) 7/12. (b) 2. (c) 12/7 . (d) 3/28. (e) None of the above.arrow_forwardPlease see below the picture below. I need help with this asap please and thank you.arrow_forwardSuppose that a decrease in the price of X results in less of good Y sold. What are X and Y called? A. substitute goods B. complementary goods C. normal goods D. inferior goodsarrow_forward
- Q16 The substitution effect of a price change leads consumers to _____ their demand for goods whose prices have risen. The income effect leads consumers to buy less of all _____ goods whose prices have risen. a. Reduce; Giffen. b. Reduce; normal. c. Reduce; complement. d. Increase; inferior. e. Increase; normal. Clear my choicearrow_forwardSuppose that a consumer spends a fixed amount of income per month on the following pairs of goods: a.tortilla chips and salsab.tortilla chips and potato chips. movie tickets and gourmet coffee d.travel by bus and travel by subway If the price of one of the goods increases, explain the effect on the quantity demanded of each of the goods. In each pair, which are likely to complement and which are likely to be substituted?arrow_forwardJerry spends his entire budget on bread and gasoline. His preferences are complete, transitive, monotonic, and convex. For Jerry, bread is an inferior good that follows the law of demand. Moreover, his cross-price elasticity of demand for gasoline with respect to the price of bread is negative. Suppose the price of bread increases, all else constant. a. Create a chart to show the total, income, and substitution effects on bread and gasoline of the increase in the price of bread. b. Use budget lines and indifference curves to graphically illustrate the three effects. Be sure to label each effect on your graph (or through the chart from part a) and plot bread on the x-axis and gasoline on the y-axisarrow_forward
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