Explain the statement people respond to incentives and disincentives in relation to the demand and supplu curve for good x

Q: A rational consumer would want as much as many goods as possible to maximize utility derived from…

A: Utility refers to the satisfaction or enjoyment a consumer can get from a service or good.

Q: Marcus is a second year business student and has two options for meals: dining at university for £6…

A: When the needs and wants of human beings are unlimited and the budget of one person is limited, it…

Q: Apply marginal utility theory to the paradox of value

A: The change in the total utility when one additional unit of good is consumed is called marginal…

Q: Pareto Efficiency

A: Pareto efficiency or optimality is one of the major criteria drawn from welfare economics for…

Q: Remy and Emile consume only blueberries (x1) and raspberries (x2). Remy has utility function U* = xf…

A: Answer: Given, The utility function of Remy: UR=x1Rx2R2 The utility function of Emile: UE=x1E2x2E…

Q: Sam is a personal trainer working for private clients. He just moved from California to a city on…

A: Demand function, P = 300 – 20 Q MC = 10 Q a) If Sam behaves like price taker, then the price is set…

Q: Is the following claim logical? Explain your answer.Actor Matt Damon will be more likely to buy a…

A: Luxury commodities are those whose demand rises as the income of the people rises.

Q: According to Marshall, the basis of consumer surplus is Law of diminishing MU

A: To find : What is basis of consumer surplus.

Q: Suppose Alphonso’s town raises the price of bus tickets from $0.50 to $1 and the price of burgers…

A: The opportunity cost is the cost incurred by not enjoying the benefit associated with other…

Q: Consider a two-good two agent economy with the following endowments and utility functions: (ef, e) =…

A:

Q: Start with a Cobb-Douglas utility function: U = XªY1-a. Set up the utility maximisation problem and…

A: The given utility function is the Cobb-Douglas function, U = X^α Y^1-α Suppose the good X price is…

Q: Tomas buys a hamburger that doesn't taste very good. He can't return the hamburger and get his money…

A: The answer is all the statements are correct (1) is true as hamburger will give negative utility and…

Q: 1. Assume you spend your entire income on two goods X & Y with prices given as Px & Py,…

A: Note: You have uploaded multiple question at a time. We shall answer only the first one. If you seek…

Q: It is defined to be the capacity of a commodity to satisffy human wants. Discount Luxury Necessity…

A: Answer: Utility: utility refers to the want satisfying power of a commodity. In other words, every…

Q: Which of the following scenarios best depicts a rational buyer? Select one: a. Damien chooses to buy…

A: A rational buyer is a well informed buyer which makes decisions to maximize his utility and…

Q: pose we have two people in the market: A, B. Their utility functions are UA = = min{x₁,2). Solve…

A: The consumer chooses consumption of the 2 products therefore, marginal rate of substitution equals…

Q: True or False: Not all inferior goods are Giffen goods. True   False

A: Inferior goods are those whose income effect is negative. Giffen goods are those whose negative…

Q: An individual has $12 dollars to spend on the two goods (y=12). The price of good #1 is $2 (p1=2)…

A: The utility function indicates that as consumption of a good increases, the total utility derived by…

Q: I submitted the other questions to this problem. Now I need C answered..  (Reference Mankiw…

A: When the wage rate per hour is $6, the customer will work for (100-L6) hours. Similarly, in both the…

Q: Suppose there are 2 individuals, A and B; 2 goods, X and Y. The utility function of A: U, = X + YA…

A: A bunch of Pareto efficient allocations in the Edgeworth box is known as a Pareto set. This begets…

Q: If price represents the buyer's 'sacrifice' to consume a particular good, explain how the…

A: Concept Many consumers buy a luxury purse on a regular basis, perhaps as frequently as they buy a…

Q: Suppose a trip to the theater costs $10, but gives 40 units of utility to a consumer. A trip to the…

A: Utility refers to the amount of satisfaction received by a consumer from the consumption of a good…

Q: Please derive mathematically the condition for consumer equilibrium then give a short intuitive on…

A: The phrase "consumer equilibrium" refers to a state in which a consumer gets maximum satisfaction…

Q: Beaded on the IC figure below, which of the following is a possible combination of good

A: The indifference curve can be a straight line if both the goods are perfect substitutes to each…

Q: What occurs according to Moore's law? Multiple Choice The power of microprocessor technology doubles…

A: Moore's Law was given by an American engineer Golden Moore.

Q: "The use of non-linear pricing schemes means that consumer behaviour will definitely break the law…

A: One of the most fundamental aspects in economics is the law of demand. It combines the law of supply…

Q: Roisin consumes only two goods, X and Y, and her utility function is given by U = XY. Her income is…

A: Condition for equilibrium combination: Marginal Rate of Substitution = Price Ratio MRS = MUx/Muy =…

Q: If a resource can be used to produce either Good A or Good B, then Good A and B are a) substitutes…

A: In economics we study how to maximize the use of scare resources along with their allocation. Scarce…

Q: Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys…

A: According to the question, Nick and Sofia, two students, are debating the differences between…

Q: Give an example of Quality/new goods bias?

A: New good bias is the tendency to not count new goods as a part of price index, and it occurs because…

Q: Assume that pickled eggs are an inferior good and its market is currently in equilibrium. What will…

A: Given: Pickled Goods are inferior good and its market is currently in equilibrium.

Q: Assume you spend your entire income on two goods X & Y with prices given as Px & Py. respectively.…

A: Given that Marshallian demand function U = X2+Y2. Price of good X = Px and price of good Y = Py

Q: Define Willingness to sell?

A: The sale is a trade where the money is traded for a product or service. It also applies to the…

Q: How does the utility-maximization model help highlight the income and substitution effects of a…

A: The indifference curve shows the different combination of two goods which gives the consumer equal…

Q: Examples of form utility?

A: Utility is defined as the complete satisfaction a consumer derives from the usage of a product or…

Q: Assume you spend your entire income on two goods X & Y with prices given as Px & Py, respectively.…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What do you mean by complementary goods give two examples of the goods which are complement to each…

A: According to the given question In general there always exist an inverse relationship between the…

Q: According to Trentmann, the grand critiques of consumerism as stupefying, dehumanizing, or…

A: According to Trentmann, the grand critiques of consumerism as stupefying,dehumanizing, or alienating…

Q: According to Marshall, the basis of consumer surplus is А. Law of diminishing MU В. Law of Equi-MU…

A: Actually a consumer surplus is very important for the business which are small as the consumer which…

Q: Which of the following are examples of inferior goods? Select the correct answer below: O Ramen…

A: Inferior goods are opposite of normal goods. The demand for inferior goods work in opposite…

Q: Maximize the utility function U=X0.6 Y0.25 subject to budget constraint 680 = 8X + 5Y Also show…

A: Utility function shows the preference of the bundle of goods and services for any individual.

Q: There are three people and two goods in an economy. The utility functions and the initial bundles…

A:

Q: The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is…

A: Given information:  Price of a=$5  Price of b=$15    MU of a=20    MU of b=?

Q: Consider a two-good two agent economy with the following endowments and utility functions: (ef, e) =…

A:

Q: Assume a primitive society that produces two goods: food and tools. There is a consumer that is…

A: In a market, an individual will be able to maximize his utility if the MRS of consuming two goods…

Q: The set of all the alternatives a consumer can afford is shown by a) an indeffirence curve b) a…

A: In economics, we study how scarce resources are used by decision-makers to satisfy the unlimited…

Q: Explain why individuals make choices that are directly on the budget constraint, rather than inside…

A: Budget constraint refers to the line or the constraint which represents the combination of the…