For the below questions, consider a consumer that consumes two goods, x and z with the following utility function. ū=x0.75 ₂0.25 Suppose initial values for income and the prices of goods x and z are y = 100, Px = 5, and Pz= 15 respectively, then the price of good x increases to Px= 10. What is the magnitude of the Total Effect? TE = -9 TE = 7.5 TE = -7.5 TE = 9

For the below questions, consider a consumer that consumes two goods, x and z with the following utility function. ū=x0.75 ₂0.25 Suppose initial values for income and the prices of goods x and z are y = 100, Px = 5, and Pz= 15 respectively, then the price of good x increases to Px= 10. What is the magnitude of the Total Effect? TE = -9 TE = 7.5 TE = -7.5 TE = 9

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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