(b) If a consumer spends all of his budget consuming exactly two goods, then is itpossible that the law of downward-sloping demand does not hold for one of thegoods?

In a market, a consumer consumes goods to satisfy his needs and pay some amount of his income in…

Answered: (b) If a consumer spends all of his…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 12SQ

See similar textbooks

Similar questions

Considering peanut butter and jelly as compliment goods, if demand of peanut butter decreases (hence, the price deacreases), would the demand of jelly decrease because the demand peanut butter decreased or increase because the price of peanut butter deacred? Or does it depend on the elascticity of the two goods?
Please help
consumptionA consumer's budget constraint is given by 500 = 40G + 10D, where G is ice cream in liters and D is drink in liters. The consumer thinks that a liter of ice cream is a perfect substitute for 3 liters of drink. Which statements are then correct?Select one or more options: a-2 liters of ice cream and 42 liters of drink are on the budget line b-The optimal choice is to consume 3 times as much drink as ice cream c-The optimal choice is to only consume ice cream d-0 liters of ice cream and 50 liters of drink are on the budget line
To maximize total utility, consumers will always choose the marginal unit of the good that yields the most marginal utility per price. True False
The following table shows the amounts of additional satisfaction (marginal utility) that Ross would get from consuming successive quantities of products A and B. a. Fill in the MU/P column for each product. Instructions: Enter your answers rounded to one decimal place. Price of Good A = $8 Price of Good B = $4 MU of Good B, Units of Good A MU of Good A, Units of Good B MU/P for A MU/P for B utils utils 1 56 1 32 2 48 28 3 32 3 24 4 24 4 20 5 20 12 6 16 10 7 12 7 8 If Ross has an income of $64, how many units of each good will he purchase to maximize his utility? Instructions: Enter your answers as a whole number. |units of good A |units of good B
There are two goods in an economy: apples (a) and bananas (b). Price of anapple is $1 and price of a banana is $2. Your income is $10. Suppose your utility function isu(a, b) = 2a2 b+5a. (8 points) How many apples and bananas will you consume?b. (4 points) Are a and b normal or inferior goods?c. (4 points) Are a and b substitutes or complements?d. (4 points) Draw the Engel curve for apples for the income levels ranging from $10, $20,$30 and so on.
(c) When the price of CCC increases from $1 to $8, calculate Maya’s substitution effect and income effect. (d) According to your calculation in part (c), is CCC a normal good or an inferior good? Explain. Is CCC an ordinary good or a Giffen good? Explain.
David perceives canned tuna (Y) as an inferior good and fresh tuna (X) as a normal good. If his income increases by 100%, and his income elasticity of both types of tuna is 1. Show the effect of this increase in income on the change in his optimal choice of canned and fresh tuna, highlighting his income-consumption curve. Clearly label your graph. Reflect the proportional changes in your graph.
The following table shows the amounts of additional satisfaction (marginal utility) that Ross would get from consuming successive quantities of products A and B. a. Fill in the MU/P column for each product. Instructions: Enter your answers rounded to one decimal place. Price of Good A = $8 Price of Good B = $4 Units of MU of Good A, Units of MU of Good B, MU/P for A MU/P for B Good A utils Good B utils 1 64 1 40 2 56 36 3 48 32 4 40 4 28 5 32 24 6. 24 6 20 7 16 7 16 If Ross has an income of $56, how many units of each good will he purchase to maximize his utility? Instructions: Enter your answers as a whole number. units of good A units of good B
Info in images
Info in images
Info in images

SEE MORE QUESTIONS

Recommended textbooks for you

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Microeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506893

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Macroeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506756

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

(b) If a consumer spends all of his budget consuming exactly two goods, then is it possible that the law of downward-sloping demand does not hold for one of the goods?