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- Scenario: e-Books and Sports Tickets Phillip has an income of $300 per month, which he uses to purchase two goods, e-Books and sports tickets. Each e-Book costs $10, and each ticket costs $15. Reference: Ref 10-23 (Scenario: e-Books and Sports Tickets) Look at the information provided in the scenario e-Books and Sports Tickets. Suppose Phillip discovers that if he spends all of his money on sports tickets, he can buy more sports tickets than he could previously because something changed. This is a result of: O A. a decrease in the price of e-Books. O B. a decrease in the price of tickets. O C. an increase in the price of e-Books. O D. an increase in the price of tickets.1. Ch. 16 Problems and Applications Q3 Suppose that people consume only three goods, as shown in this table: Tennis Balls Golf Balls Bottles of Gatorade 2020 Price $2 $5 $2 Quantity 200 80 100 2021 Price $3 $5 $4 Quantity 200 80 100 Complete the following table by computing the percentage change in price for each of the three goods. Tennis Balls Golf Balls Bottles of Gatorade Percentage Change % % % Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is % True or False: If you were to learn that a bottle of Gatorade increased in size from 2020 to 2021, that information would lower your estimation of the inflation rate. 22,890Questions 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:
- ) Kuzey is a writer. He consumes only paper and pencils. Given his income, he chooses to consume 10 sheets of paper and 2 pencils. The price of a sheet of paper is 1YTL and the price of a pencil is 5YTL. His friend Güney comes up with two trade offers to Kuzey: In scenario 1, he offers Kuzey 1 pencil in return for 5 sheets of paper. In scenario 2, he offers 6 sheets of paper in return for 1 pencil. How would Kuzey respond to these trade offers? Explain why. (Would he accept or reject these offers? Note that the above information may not be sufficient to answer. State that if that is the case.) Use diagrams as necessary in answering this question.Quantity of Potato Chips A B E C Quantity of Diet Coke Refer to Figure 21-1. Which point in the figure represents the consumer's income divided by the price of Potato Chips? Point A Point C Point D Point E(Figure: Total Expenditures) As the price of the product rises from $0 to $40, what happens to total expenditures? Price $100 90 80 70 60 50- 40 30 20 10- D 0 10 20 30 40 50 60 70 80 Quantity Total expenditures first increase and then decrease, as price approaches the midpoint of the demand curve. Total expenditures remain unchanged. ● Total expenditures decrease, reaching a minimum at a price of $40. Total expenditures increase, reaching a maximum at a price of $40.
- NOTE: THIS IS FOR A NON-GRADED QUIZ. Louis has stable preferences and consumes two goods, wine and cheese. In 1994, the price of wine was $4/glass and the price of cheese was $2/ounce. Louis's income was $60 and he bought 12 glasses of wine and 6 ounces of cheese. In 1995, wine costs $2/glass and cheese costs $4/ounce. Louis's income is still $60. a. Draw both years' budget lines. Where do they cross? b. What is Louis's marginal rate of substitution of wine for cheese in 1994? [hint: you can't use calculus]Joe likes eating candy and drinking soda, The price of a bar of candy is $2 while the price of a can.of soda is $3. joe has a budeet of 529. Suppose that candy and soda can only be purchased and consumed as whole units (in other words it is impossible for Joe to purchase 1/3 of a bar of candy or A/5 of a can of soda). Furthermore, assume that it is impossible for Joe to spend more than his budget (that is, his total expenditure on candy and soda cannot exceed his budget). The following table describes the marginal benefit (expressed in $) he obtains from each bar of candy and can of soda Marginal Benefit from Marginal Benefit from Soda (in $) Unit Candy (in $) 180 180 160 150 3 140 120 60 5. 100 45 60 30 7. 40 15 8 10 -30 9. 60 -90 10 -100 -120 Joe's optimal consumption bundle includes (enter a numerical answer here) bars of candy and (enter o (enter a numerical answer here) cans of soda, and the total benefit he derives from the consumption of the optimal bundle is $ numerical answer…Paul consumes cheese and wine and his income is $200. Is it possible that when the price of one pound of cheese is $5 and the price of wine per glass is $5, Paul consumes 10 glasses of wine and 30 pounds of cheese per week, but when the price of one pound of cheese is $2 and the price of wine per glass is $10, Paul does not consume any cheese and spends all of his income on wine?
- 2. Problems and Applications Q3 Suppose that people consume only three goods, as shown in this table: 2023 Price Quantity 2024 Price Quantity Percentage Change Tennis Balls True False $2 100 $2 100 True Golf Balls Bottles of Gatorade Complete the following table by computing the percentage change in price for each of the three goods. False $4 100 $6 100 % $2 200 $3 200 Tennis Balls Golf Balls Bottles of Gatorade % Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is True or False: If you were to learn that a bottle of Gatorade increased in size from 2023 to 2024, that information would raise your estimation of the inflation rate. % % True or False: If you were to learn that Gatorade introduced new flavors in 2024, that would imply that the inflation rate you estimated is understated.Table: Utility from Burgers and Milkshakes MUSHAKES BURGERS 0 SHAKES 0. -36 a. 1; 1 b. 0; 2 c. 5; 0 d. 2; 1 -32 -28 20 -16 8 6 7 MUBURGERS -45 40 -35 -30 -25 20 15 10 3. (Ref 19-12 Table: Utility from Burgers and Milkshakes) Use Table 19-12: Utility from Burgers and Milkshakes. David's marginal utilities for milkshakes and burgers are given in the table. The price of milkshakes is $2, and the price of burgers is $5. If David's income is $10, to maximize his utility, he buys shake(s) and burger(s).(Figure: Total Expenditures) As the price of the product rises from $0 to $40, what happens to total expenditures? Price $100 90 80 70 60 50- 40 30 20 10- 0 D T Quantity 10 20 30 40 50 60 70 80 Total expenditu first increase and then Total expenditures remain unchanged. Total expenditures decrease, reaching a minimum at a price of $40. Total expenditures increase, reaching a maximum at a price of $40. case. price approaches the midpoint of the demand curve.
