In the below figure, a consumer is initially in equilibrium at point C. The consumer's income is $750, and the budget line through point C is given by $750 = $150X + $375Y. When the consumer is given a $ 300 gift certificate that is good only at store X, she moves to a new equilibrium at

In the below figure, a consumer is initially in equilibrium at point C. The consumer's income is $750, and the budget line through point C is given by $750 = $150X + $375Y. When the consumer is given a $ 300 gift certificate that is good only at store X, she moves to a new equilibrium at

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In the below figure, a consumer is initially
in equilibrium at point C. The consumer's
income is $750, and the budget line
through point C is given by $750 = $150X
+ $375Y. When the consumer is given a $
300 gift certificate that is good only at
store X, she moves to a new equilibrium at
point D. a. Determine the prices of goods
X and Y. Price of X: $ 150 Price of Y: $ 375
b. How many units of product Y could be
purchased at point A? rmal or an inferior
good?
Product Y
c
Product X
F

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