[Select] ✰ "A decrease in income pivots the budget line around the bundle initially consumed." [Select] "If good 1 is measured on the horizontal axis and good 2 is measured on the vertical axis, then an increase in the price of good 1 will not change the horizontal intercept of the budget line."
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True or False?
![[Select]
✰ "A decrease in income pivots the budget line around
the bundle initially consumed."
[Select]
"If good 1 is measured on the horizontal axis and
good 2 is measured on the vertical axis, then an increase in the price of good 1 will
not change the horizontal intercept of the budget line."](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3604ad54-ad7c-4847-b7ff-aaf87321c1d3%2F78acde34-0b11-4e27-b683-a264fc008ab6%2Foml21q9_processed.png&w=3840&q=75)
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- Quèstion 21 "Considering that Salah is tending to buy X and Y, reaching equilibrium may be achieved if." O He consumed the same quantities from X and Y Marginal utility of expenditure for good X equals marginal utility of expenditure for good Y O Marginal utility for good X equals marginal utility for good Y O Total utility for good X equals total utility for good Y-A Suppose that with a budget of $160, Fatima spends $96 on sushi and $64 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. Then, after the price of bagels falls to $1 per bagel. Instructions: Enter your answers as a whole number. How many pieces of sushi and how many bagels did Fatima consume before the price change? pieces of sushi and bagels At the new prices, how much money would it have cost Fatima to buy those same quantities (that is, the quantities that she consumed before the price change)? Given that it used to take Fatima's entire $160 to buy those quantities, how big is the income effect caused by the lower price of bagels?Q43 Laurie spends all of her money buying bread and cheese. The marginal utility she receives from the last loaf of bread is 60 and from the last block of cheese is 30. The price of bread is $3 and the price of cheese is $2. Laurie... a. Should buy more cheese and less bread to maximise her utility. b. Should buy more bread and more cheese in order to maximise her utility. c. Spends too much money on bread and cheese. d. Should buy more bread and less cheese in order to maximise her utility. e. Is buying currently the utility-maximising amount of bread and cheese.
- 1. Suppose you get utility from two goods, food and clothing, and have a certain amount income. Explain briefly how to derive the demand curve for food while the price of clothing and the amount of income remain constant?Problem 6 Consider the following diagram that shows the effects of a decrease in the price of beer on a consumer's choice of consumption of beer and pretzels: Ber 19 17 ICI Pretzds a.) What is the value of the income effect on beer consumption of the price change? b.) Are beer and pretzels complements or substitutes?23. Suppose that there are two goods in an economy and that all prices double. At the sametime, the consumer’s income triples, then:(a) The budget line becomes steeper(b) The budget line becomes flatter(c) The budget line does not change(d) The slope of the budget line does not change, but it makes a parallel shift in towardsthe origin(e) The slope of the budget line does not change, but it makes a parallel shift out fromthe origin
- 8: Glven that chicken and potatoes are complements In consumption, If the price of chicken Increases there would be: O (A) an increase in the dernand for potatoes. O (B) an Increase in the quantity of potątoes demanded. O (C) a decrease in the demand for potatoes. O (D) a decrease In the quantity of potatoes demanded. O (E) no change in the demand for potatoes.For normal goodsA) the substitution effect of a price decrease will decrease the quantity of the good demanded while theincome effect of a price decrease will increase the quantity of the good demanded.B) the substitution and income effects of a price decrease will both increase the quantity of the gooddemanded.C) the substitution and income effects of a price decrease will both decrease the quantity of the gooddemanded.D) the substitution effect of a price decrease will increase the quantity of the good demanded while theincome effect of a price decrease will decrease the quantity of the good demanded.6. Suppose the following information regarding Joe's consumption habits. Quantity of Wine Quantity of Вooks Price of Wine Price of Books Income $10 $12 $15 $20 $10 $10 $10 $10 $150 $150 $150 $150 7 5 9 4 9 2 11 Graph Joe's demand curve for wine and price-consumption curve for when the price of wine changes.
- 6. When a good is normal:(a) An increase in income raises consumption at each price, so the demand curve shifts tothe left(b) An increase in income raises consumption at each price, so the demand curve shifts tothe right(c) A decrease in income lowers consumption at each price, so the demand curve shifts tothe right(d) An increase in income lowers consumption at each price, so the demand curve shiftsto the left.Exercise 2 Sketch the demand and supply curve to show the change in equilibrium price & quantitywhen: a) The income of an individual increases. (Draw for both normal & inferior goods)b) Assume that both the supply of bottled water and the demand for bottled water rise during the summer but that supply increases more rapidly than demand. c) If a popular celebrity involved in marketing a product.PROBLEM You are choosing between two goods, X and Y, and your MU from each is shown in the table below. Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? Using the two prices and quantities of X, derive a demand curve for X. 7. Assume that, other things remaining unchanged, your income is $9 and the prices of Y is $1, and the price of product X falls to $1. How much will be the total utility for product X only to maximize utility? Use a number, no decimal value, no commas, no space, no unit of measurement. 8. Assume that, other things remaining unchanged, your income is $9 and the prices of Y is $1, and the price of product X falls to $1. What maximum total utility for products X and Y that will you realize? Use a number, no decimal value, no commas, no space, no unit of measurement. please answer all questions. Thanks
