In the above figure a consumer is initially at equilibrium at point C. The consumer’s income is $400, and the budget line through point C is given by $400 = 100X + 200Y. When the consumer is given a $100 gift certificate that is good only for product X, she moves to a new equilibrium point at point D. (a) How many units of product X will be purchased at point B? Please explain. (b) How many units of Product X will be purchased at point F? Please explain. (c) Please rank the bundles of goods A, B, C, D, from least preferred to most preferred (from  lowest utility or satisfaction to highest utility of satisfaction).

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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In the above figure a consumer is initially at equilibrium at point C. The consumer’s income is $400, and the budget line through point C is given by $400 = 100X + 200Y. When the consumer is given a $100 gift certificate that is good only for product X, she moves to a new equilibrium point at point D.

(a) How many units of product X will be purchased at point B? Please explain.

(b) How many units of Product X will be purchased at point F? Please explain.

(c) Please rank the bundles of goods A, B, C, D, from least preferred to most preferred (from 

lowest utility or satisfaction to highest utility of satisfaction).

Product YA
A
B
с
D
E
1₂
F
Product X
Transcribed Image Text:Product YA A B с D E 1₂ F Product X
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