5. Which is the consumer's demand curve for X in the following graph if the price of Y is $50. In youranswer, write down the rationale for your choice.3001301000Quantity of Y6060048B1,000DA18 24U31,500Quantity of XX1125151006. The figure below shows a consumer maximizing utility at two different prices (the left panel) and theconsumer's demand for good X at the same two prices of good X (the right panel). The price of goodY is $4.50. When the price of X increases from point S to point R along the demand curve, thesubstitution effect of the price increase isand the income effect isPXPrice of X400 6006D₁RD41,00024D₂·D3Quantity demanded of X1,500Demand for X

DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…

5. Which is the consumer's demand curve for X in the following graph if the price of Y is $50. In your answer, write down the rationale for your choice. 300 130- 100 0 Y U₁ 600 1,000 U3 1,500 25 15 10 0 PX 400 600 D₁ D4 1,000 1,500

5. Which is the consumer's demand curve for X in the following graph if the price of Y is $50. In your answer, write down the rationale for your choice. 300 130- 100 0 Y U₁ 600 1,000 U3 1,500 25 15 10 0 PX 400 600 D₁ D4 1,000 1,500

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

5. Which is the consumer's demand curve for X in the following graph if the price of Y is $50. In your
answer, write down the rationale for your choice.
300
130
100
0
Quantity of Y
60
600
48
B
1,000
D
A
18 24
U3
1,500
Quantity of X
X
11
25
15
10
0
6. The figure below shows a consumer maximizing utility at two different prices (the left panel) and the
consumer's demand for good X at the same two prices of good X (the right panel). The price of good
Y is $4.50. When the price of X increases from point S to point R along the demand curve, the
substitution effect of the price increase is
and the income effect is
PX
Price of X
400 600
6
D₁
R
D4
1,000
24
D₂
·D3
Quantity demanded of X
1,500
Demand for X

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