A consumer's weekly income is $5000, theprice of a cell phone is $1250, and the price ofa watch is $500. What quantity of cell phonesand watches will maximize the consumer'sutility if they spend their entire weekly incomeon cell phones and watches? Explain yourusingI.answermarginalSuppose that thisconsumer's income elasticity for watches isanalysis.5.4. what does this indicate about watches? Ifthe cross-elasticity calculates to 0.8 what doesthis indicate about the relationship betweenwatches and cell phones?

Price: It refers to the cost of goods and services. The more the price in the economy the less the…

A consumer's weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer's utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis. I. Suppose that this consumer's income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones?

A consumer's weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer's utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis. I. Suppose that this consumer's income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...

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