Please no written by hand morts-c. Suppose the household income doubles to $1,000. Sketchthe new budget constraint facing the household.d. Suppose after the change the household spends $200 onY and $800 on X. Does this imply that X is a normal or aninferior good? What about Y? 1.4 Suppose the price of X is $5 and the price of Y is $10 anda hypothetical household has $500 to spend per monthon goods X and Y.a. Sketch the household budget constraint.b. Assume that the household splits its income equallybetween X and Y. Show where the household ends up onthe budget constraint.

The budget constraint shows the maximum capacity of consumer to spend on two goods or commodities.…

c. Suppose the household income doubles to $1,000. Sketch the new budget constraint facing the household. d. Suppose after the change the household spends $200 on Y and $800 on X. Does this imply that X is a normal or an inferior good? What about Y?

c. Suppose the household income doubles to $1,000. Sketch the new budget constraint facing the household. d. Suppose after the change the household spends $200 on Y and $800 on X. Does this imply that X is a normal or an inferior good? What about Y?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 6SQP

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