3. In the following graph the consumer begins in equilibrium with an income of $3,600, facingprices of P₁ = $60 and Py = $36.Quantity of Y10075a. In equilibrium,20b. In the new equilibrium,_38 48 60Now let the price of X fall to $30.e. Good X is a(an).units of X are consumed.Quantity of Xc. To isolate the substitution effect, $_consumer.units of X are consumed.d. The total effect of the price decrease isThe income effect isgood.9020must be taken away from theThe substitution effect is

The consumer equilibrium is reached where the indifference curve tangents the budget line. The…

Answered: 3. In the following graph the consumer…

3. In the following graph the consumer begins in equilibrium with an income of $3,600, facing prices of P₁ = $60 and Py = $36. 100

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. In the following graph the consumer begins in equilibrium with an income of $3,600, facing
prices of P₁ = $60 and Py = $36.
Quantity of Y
100
75
a. In equilibrium,
20
b. In the new equilibrium,_
38 48 60
Now let the price of X fall to $30.
e. Good X is a(an).
units of X are consumed.
Quantity of X
c. To isolate the substitution effect, $_
consumer.
units of X are consumed.
d. The total effect of the price decrease is
The income effect is
good.
90
20
must be taken away from the
The substitution effect is

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