4. Assume that the following graph show the indifference curve and budget line for a consumerwho is choosing between "all other items" and "hand sanitizer".All other itemsAHand sanitizerWe know that the preferences and demand for hand sanitizer increased dramatically starting inmid-March 2020 due to the coronavirus pandemic. How would you show a change inpreferences for hand sanitizer on the graph given above? Would the budget line change, or wouldthe position of the indifference curve change? You may assume that income and prices of allother items and hand sanitizers did not change. Please give an explanation and show the changeson the graph.

In economics, an indifference curve represents a series of combinations of two goods that a consumer…

Answered: 4. Assume that the following graph show…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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?
The following table shows the total utility that Antonio receives from consuming different number of apples per week. What is his marginal utility from consuming the second apple? Quantity of Apples 01234 Total Utility 0 20 34 44 50 34 14 44 06 10
do you agree that we have such a diminishing marginal utility of income just like we have a diminishing marginal utility when we consume more of a good or service e.g, the marginal utility of of your 12th pair of shoes is probably zero or close to zero? second in your estimation, at what level of income will the marginal utility of income start to diminish? do you think other people will agree with you? why? finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation?
Only typed answer
Info in images
Illustrate and explain how consumer equilibrium is achieved using the indifference curve?Discuss how the demand elasticity of a product changes? Give examples.
Only typed Answer
5. Indifference curves and utility maximization Becky plays the cello as part of a string duo and advertises booking opportunities using brochures she distributes in coffee shops around the city. Making one grayscale brochure costs $0.02, but adding color increases the cost to $0.10 per brochure. Becky sets aside a monthly budget of $20.00 for creating brochures. The following graph shows three of Becky's indifference curves for the number of grayscale and color brochures that she makes. Use the green line (triangle symbol) to plot Becky's budget constraint. Then, place the black point (plus symbol) on the graph to indicate Becky's optimal consumption choice given that budget constraint. GRAYSCALE BROCHURES 1000 900 800 700 600 500 400 300 200 100 0 0 25 50 ¹₂ 75 100 125 150 175 200 225 250 COLOR BROCHURES Budget Constraint Optimum ? At the optimum that you indicated on the graph, Becky's marginal rate of substitution is equal to color. in grayscale per brochure in
26. Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys A) the combination that gives him equal total utility from pies and soda B) 2 pies and 2 cans of soda C) oniy sodas because they are iess expensive D) the combination that gives him the same marginai utility per doillar spent on pies as on soda
5. The price of good x increases from 4 to 6. A consumer with an income of 120 buys 15 units of good x before the change and 10 units after. If the same consumer kept their utility constant and minimized expenditure, they would buy 8 units of x after the price change. What are the total effect, substitution effect, and income effect?
c. Samuelson maximizes his utility by spending his entire income of $29 on video 3.5 games and cards. The price of video games is $4, and he buys 2 games. The marginal utility from the last card he buys is 42. The table represents Samuelson's marginal utility from each good. Marginal utility Quantity Video Games Cards 1 45 70 28 54 3 16 42 4 10 16 Required: i. Calculate the price of a card using the condition that Samuelson's marginal utilities per dollar are equal. ii. What is Samuelson’s total utility?
Considering the following Diagram of consumer equilibrium, answer the following questions. If consumer has $100 to spend on X and Y at Budget line DE, what are the prices of X and Y products. What combination of X & Y maximizes the consumer’s total utility at Budget line DE? Why a consumer has moved to point B on Budget line DE1 from Point A of Budget line DE? Derive the demand curve of X product. What is relationship between X and Y products

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS