A consumer is choosing between magazines an His optimums are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (P,) is equal to $5.00. How do these changes in the price of books affect the demand for magazines? demand remains constant demand increases demand decreases
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- Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?4. The relationship between a consumer’s income and the quantity of X, he consumes is given by the equation M=1000Q2 Calculate his point price income elasticity of demand for X when his income is 64,000.12. What are the mathematical steps in deriving demand and indirect utility?
- An individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the demand curve for wine. 70- TTTTI Wine Price Book Price Wine Вooks Budget $1200 $1200 60- $15 $12 $12 $12 40 50 $30 $60 20 50 50- 10 50 $1200 40- 100- 90- 30- 80- 70- 20- 60- A 50- PCC 10- 40- 30- 0- 20- 10 20 30 40 50 10- Wine 0+ 0 10 20 30 40 50 60 70 80 90 100 Wine Using the three-point curved line drawing tool, draw the demand curve for wine in the figure to the right. Label this curve 'Demand'. Carefully follow the instructions above, and only draw the required object. Books Price10. Problems and Applications Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. 00 Adults are more likely to be addicted to cigarettes. smaller Teenagers do not have as much income as adults, so they are more price sensitive. larger It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. % than the effect 5 yearsAn individual sets aside a certain amount of his income per month to spend on his two hobbies, collecting wine and collecting books. Given the information below, illustrate the demand curve for wine. Wine Price Book Price $15 $12 $30 $12 $60 $12 Books 100- 90- Wine 40 20 10 LOTB FO- Books 50 50 50 80- 70- 60- 50- 40- 30- 20- 10- 0- 0 10 20 30 40 50 60 70 80 90 100 Wine PCG Budget $1200 $1200 $1200 N Using the three-point curved line drawing tool, draw the demand curve for wine in the figure to the right. Label this curve 'Demand". Carefully follow the instructions above, and only draw the required object. CULD
- IGCSE ECONOMICS As a person buys more of a good, the total utility they get from it rises. But it does not rise by the same amount each time. In fact, it rises by a smaller amount with each good consumed. The extra utility gained from consuming one more unit is called marginal utility. Question A demand schedule for the consumption of orange light bulbs is shown below: Price of orange light bulbs Market demand per month 50p 100 000 40p 150 000 200 000 30p 20p 260 000 10p 330 000 5p 400 000 1) Plot the demand curve on a piece of graph paper, labelling it correctly. Label the page demand curve 2 2) Use the graph to work out how many orange light bulbs would be demanded at a price of: Price Number of bulbs demanded 45p 50 35p 50 15p 3) Explain the difference between individual demand and market demand.10. Problems and Applications Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be from now. % than the effect 3 months Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Adults are more likely to be addicted to cigarettes. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.2. The following hypothetical table is John's demand for pandesal from Dec 2016 to January 2017 given his monthly income. Price per pc Quantity Income (P/mo) Dec 2016 2.00 100 5,000 Jan 2017 2.00 120 4,000 a. What happened to John's income after December? b. What happened to the quantity of pandesal bought by John? What economic concept is being shown by the relationship between John's income and his demand for pandesal? C.
- |Unit 3 Midterm Economics A docs.google.com/forms/d/e/1FAlpQLSfDzcagnpq9EUKBs3AWMb. a change in quantity demanded for one product or service causes a change in simple demand for a related product or service. * In 2. O Elasticity of Demand O Cross Elasticity of Demand O Diminishing Marginal Utility O Cost-Benefit Analysis O All of These O None of These The rules of the price system operate in all markets of a capitalist/market economy. The market where consumers earn income Market. by selling resources to business resources is called O ConsumerPrice (dollars per can) 2.50 2.00 1.50 1.00 0.50 D 2 3 4 Quantity (cans of soda per day) The graph illustrates the demand curve for soda. After a rise in the price of a soda From $1.00 a can to $2.00 a can, the quantity of soda demanded A) decreases from 1 can to 0 cans a day. B) remains unchanged. C) increases from 0 cans to 2 cans a day. D) decreases from 2 cans to 0 cans a day.Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each month? Mallory's Demand for Sodal Rick's Demand for Soda Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month) rev: 02_01_2018_QC_CS-116371 O 70 50 O 30 O 20 Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month)