7. (10 points) What is the difference in the impact of a cash gift of $20 on the budget line of a consumer, compared to the impact of a gift card of $20 for good X on the budget line of the consumer? Assume that both good X and good Y are normal goods. Please explain and show the difference on the graphs below. Y Cash gift of $20 Y Gift card of $20 for X X x
7. (10 points) What is the difference in the impact of a cash gift of $20 on the budget line of a consumer, compared to the impact of a gift card of $20 for good X on the budget line of the consumer? Assume that both good X and good Y are normal goods. Please explain and show the difference on the graphs below. Y Cash gift of $20 Y Gift card of $20 for X X x
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![7. (10 points) What is the difference in the impact of a cash gift of $20 on the budget line of a
consumer, compared to the impact of a gift card of $20 for good X on the budget line of the
consumer? Assume that both good X and good Y are normal goods. Please explain and show the
difference on the graphs below.
Y
Cash gift of $20
Y
Gift card of $20 for X
X
x](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f1120be-c432-4c54-b393-0e444adaafed%2F3e933fbb-f2b5-42e8-a7d2-5182e1c6a5f6%2Faljkf1b_processed.png&w=3840&q=75)
Transcribed Image Text:7. (10 points) What is the difference in the impact of a cash gift of $20 on the budget line of a
consumer, compared to the impact of a gift card of $20 for good X on the budget line of the
consumer? Assume that both good X and good Y are normal goods. Please explain and show the
difference on the graphs below.
Y
Cash gift of $20
Y
Gift card of $20 for X
X
x
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