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

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

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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:
10) Figure 1 shows some indifference curves and budget lines for consumer Yusuf. Milk A B Cheese Figure 1 If Yusuf's income increases, his optimal consumption changes from point A to point B. Which of the following statements is true for Yusuf? (a) Cheese and milk are substitutes. (b) Cheese is an inferior good. (c) Milk is an inferior good . (d) Milk is a normal good. (e) None of the above.
Suppose consumer consume two goods. Can both goods be inferior? Can one of the goods be inferior? Explain your reasoning clearly. 19
1. John spends PLN 60 per week on two goods: x and y. The price of good x is PLN 2 and the price of good y is PLN 6. The utility function is: U(x, y) = x² + y a) What quantities of products x and y does he purchase each week at equilibrium? b) What will happen if Piotr's income increases by PLN 6 per week? What will be the new demand for x and y?4
3) For Nour doughnuts and muffins are perfect substitutes. Doughnuts are £4 a box and muffins are £3 a box. The boxes hold equal numbers. Nour has budgeted £48 a month to spend on these sweets. Which of the following is correct? (a) Nour will buy 12 boxes of doughnuts and no muffins per month. (b) Nour will buy 6 boxes of doughnuts and 8 boxes of muffins per month. (c) Nour will buy no doughnuts and 16 boxes of muffins per month . (d) From this information it cannot be determined how many muffins or doughnuts Nour will buy because the marginal utilities for muffins and doughnuts are not given. 4) The supply of sugar is given by Q, = -50 + 1/2 P. Determine the arc price elasticity of supply between Q = 40 and Q = 100. (a) 7/12. (b) 2. (c) 12/7 . (d) 3/28. (e) None of the above.
For normal goodsA) the substitution effect of a price decrease will decrease the quantity of the good demanded while theincome effect of a price decrease will increase the quantity of the good demanded.B) the substitution and income effects of a price decrease will both increase the quantity of the gooddemanded.C) the substitution and income effects of a price decrease will both decrease the quantity of the gooddemanded.D) the substitution effect of a price decrease will increase the quantity of the good demanded while theincome effect of a price decrease will decrease the quantity of the good demanded.
12)Suppose a consumer has $100 to spend on two goods, shoes and shirts. If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each, which of the following combinations is unaffordable to the consumer? A) 0 pairs of shoes and 0 shirts B) 2 pairs of shoes and 4 shirts C) 5 pairs of shoes and 0 shirts D) 0 pairs of shoes and 7 shirts E) 2 pairs of shoes and 3 shirts
Chocolate Syrup (cups) 10 5 Mustard (gallons) 4) Robert's preferences are shown in the diagram above 10 Suppose that Robert has $96. The price of Mustard is $24/gallon, and the price of Syrup is $12/cup. Suddenly the price of Mustard falls to $12/gallon. a) Show the Income and Substitution effects of this change on the diagram. b) Is Robert better off? c) At the new prices, how much money does Robert need to be as happy as he was initially? d) What is the most that Robert is willing to pay to induce the Mustard seller to reduce the price from $24/gallon to $12/gallon?
pls i only need the answer thank you
True or False?
Answer should be typed.
4. Describe what is meant by a normal good. Provide a real-life example in your own words. What is an inferior good? How does a change in income impact the demand for inferior goods?