↑. K Khalid's latte and paperback book budget is $30 a week. The price of a latte is $2 and the price of a paperback book is $5. 16- Quantity (lattes per week) Draw Khalid's budget line and label it. >>> Plot the quantity of paperback books on the x-axis. 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0+ G 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Quantity (paperback books per week) >>> Draw only the objects specified in the question.

What is the formula for calculating elasticity?

If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?

Why is the supply curve with constant unitary elasticity a straight line?

The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?

Would you expect total utility to rise or fall with additional consumption of a good? Why?

Suppose you could buy shoes one at a time, miter than in pain. What do you predict the cross-price elasticity for left shoes and right shoes would be?

Why does a change in income cause a parallel shift in the budget constraint?

Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.

As a college student you work at a part-time job, but your parents also send you a monthly allowance. Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?