Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her entire income. The prices of the two goods are Rs 6 and Rs 8 respectively. How much is the consumer’s income?
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Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her entire income. The prices of the two goods are Rs 6 and Rs 8 respectively. How much is the consumer’s income?
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- Assume that a college student spends her income on books and pizza. The price of a pizza is $8.00, and the price of a book is $15. If she has $100 of income, she could choose to consumeASAP according to helly only needed answer Q. 8. Suppose a consumer can afford to buy 6 units of good 1 and 8 units ofgood 2 if she spends her entire income. The prices of the two goods are ₹ 6 and₹ 8 respectively. How much is the consumer's income ?The graph shows the budget line for a consumer who only buys cookies and magazines. If the consumer's income is $20, what is the price of a cookie? Cookies (number per week) 24 20 16 8 0 2 4 6 8 10 12 Magazines (number per week)
- Joe's income is $100 a day and he currently buys two goods: fresh fruit (F) and cheese (C). The price of a unit of fresh fruit is $4 and the price of a unit of cheese is $5. (Assume that cheese is measured on the y-axis and fresh fruit is measured on the x-axis.) Which of the following statement is TRUE? Select one: If Joe spends all his income on cheese he can purchase 25 units of cheese Ob The opportunity cost of one unit of fresh fruit is 1.25 units of cheese Oc Joe would trade one fresh fruit for 0.8 unit of cheese Od. If Joe spends all his income on fresh fruit he can purchase 20 units of fresh fruitSuppose that a consumer has an income of $10 per period, and that he must spend it all on meat or potatoes. If meat is $2.00 per pound and potatoes are $2.00 per pound, draw the consumer's budget line on a graph. identify the quantity of meat and potatoes that would be consumed.Jim has made his best affordable choice of muffins and coffee. He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each. Muffins and coffee are ordinary goods. Now, the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup. Will Jim now be able and want to buy 10 muffins and 20 coffees? Which situation does Jim prefer: muffins at $1 and coffee at $2 a cup or muffins at $1.50 and coffee at $1.75 a cup? When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup, Jim able to buy 10 muffins and 20 coffees. Jim O A. is; does not buy this combination because the marginal rate of substitution has changed. B. is; buys this combination because the marginal rate of substitution has not changed. O C. is not; does not buy this combination because with the change in price he can no longer buy 2 cups of coffee to drink with each muffin O D. is not; does not buy this combination because he can't afford it Jim prefers to…
- Suppose that a consumer has $200 to spend on two goods: beer and pretzels. The price of beer is $6.00 and the price of pretzels is $3.00. What is the relative price of pretzels? $3.00 $6.00 1/2If the consumer income is OR 656, price of good (X) is OR 56.6 and the price of good (Y) is OR 40, what is the quantity of good (Y) purchased by the consumer if he is only purchasing good (Y). a. 11.59 b. 0.06 c. 0.09 d. 16.40How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?
- What is “Compensating Variation”? What is “Consumer’s Surplus”? What is “Equivalent Variation”? What are they trying to measure?Use the information below to answer the following questions. Fact 9.3.1 Marc has an income of $20 and spends it on two goods, root beer (measured on the vertical axis) and chips (measured on the horizontal axis). The price of root beer is $1 a can. The price of chips is $0.50 a bag. Initially, Marc chooses to consume 10 cans of root beer and 20 bags of chips. Then the price of root beer rises to $1.50 per can and the price of chips falls to $0.25 a bag. Refer to Fact 9.3.1. Mare's initial marginal rate of substitution was OA equal to 2 cans of root beer given up for each bag of chips gained. OB. equal to 10 cans of root beer given up for each bag of chips gained. OC not calculable with the information given. OD equal to 1 can of root beer given up for each bag of chips gained. OE. equal to 1/2 can of root beer given up for each bag of chips gained.Ravi has £21 to spend on pastries and biscuits. If he spends all the money on pastries, he can afford 15 pastries. The slope of Ravi’s budget line (assuming his pastries consumption is measured on the horizontal axis and his biscuits consumption is measured on the vertical axis) is -3.5 (3.5 in absolute terms). Calculate the price of a pastry and the price of a biscuit. Write down Ravi’s budget equation and draw the corresponding budget line. Mark the consumption bundle mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. Discuss how Ravi’s budget set would change if his budget doubles. Show the relevant changes graphically. How could the price of a pastry increase so that Ravi could still afford to buy 15 pastries? Discuss how Ravi’s budget constraint would change if the government imposed a tax of £0.50 per pastry and £0.50 per biscuit.
