Help me answer this macroeconomics theory question 01bb) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how muchmoney would Robert need to be given in order to leave him just as well off after the price change as hewas before the price change?c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how muchmoney is Robert willing to pay to avoid the increase in price? no has noitsupaylale) 1 anoien052d bac, 12 alto sagsb 12 aixto song of TPage 6 Questions 6 (Demand). When the price of x, is $8 and the price of x, is $5, Jenny consumes 20 units of x, and 10units of x₂. Suppose that when the price of x₂ increases to $7, Jenny consumes 25 units of x₁.a) What type of goods are x, and x₂?b) How many units of x₂ does Jenny consume after its price increases? Hinfirst allocation of goods.Caloa) What is Robert's original optimal consumption bundle and utility?her income with theQuestions 7 (Slutsky Equation and Consumer Surplus). Robert's utility function for x, and x₂ is:omU (X1, X₂) = x1 * x2The price of x, is $1, the price of x₂ is $1, and his income is $20.Page 5

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b) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how much money would Robert need to be given in order to leave him just as well off after the price change as he was before the price change? c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how much money is Robert willing to pay to avoid the increase in price? has noiteapa yale) anoiton 1092

b) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how much money would Robert need to be given in order to leave him just as well off after the price change as he was before the price change? c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how much money is Robert willing to pay to avoid the increase in price? has noiteapa yale) anoiton 1092

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 19SQ

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Question

Help me answer this macroeconomics theory question

01bb) Suppose the price of x, increases to $2. What is the compensating variation? In other words, how much
money would Robert need to be given in order to leave him just as well off after the price change as he
was before the price change?
c) What is Robert's equivalent variation if the price of x, increases to $2? In other words, how much
money is Robert willing to pay to avoid the increase in price? no has noitsupaylale) 1 anoien
052
d bac, 12 alto sagsb 12 aixto song of T
Page 6

Questions 6 (Demand). When the price of x, is $8 and the price of x, is $5, Jenny consumes 20 units of x, and 10
units of x₂. Suppose that when the price of x₂ increases to $7, Jenny consumes 25 units of x₁.
a) What type of goods are x, and x₂?
b) How many units of x₂ does Jenny consume after its price increases? Hin
first allocation of goods.
Calo
a) What is Robert's original optimal consumption bundle and utility?
her income with the
Questions 7 (Slutsky Equation and Consumer Surplus). Robert's utility function for x, and x₂ is:om
U (X1, X₂) = x1 * x2
The price of x, is $1, the price of x₂ is $1, and his income is $20.
Page 5

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

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Questions 6 (Demand). When the price of x1 is $8 and the price of x2 is $5, Jenny consumes 20 units of x1 and 10 units of x2. Suppose that when the price of xX2 increases to $7, Jenny consumes 25 units of x1. a) What type of goods are x1 and x2? b) How many units of x2 does Jenny consume after its price increases? Hint: Calculate her income with the first allocation of goods. Questions 7 (Slutsky Equation and Consumer Surplus). Robert's utility function for x and xa is:
(a) If a consumer has to choose between McDonald burger and King Burger, both are perfect substitute to each other. Explain the conditions of consumer's equilibrium with the help of graph.
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Exercise 2 Sketch the demand and supply curve to show the change in equilibrium price & quantitywhen: a) The income of an individual increases. (Draw for both normal & inferior goods)b) Assume that both the supply of bottled water and the demand for bottled water rise during the summer but that supply increases more rapidly than demand. c) If a popular celebrity involved in marketing a product.
True or False?