Let pi and p2 be the prices of good I and good 2, respectively, and let I be income. Which of the following is true of the following demand curve: q, = 60 – 3p; – 2p2 + 21? a. good 1 is inferior, and good 1 and 2 are substitutes. b. good I is inferior, and good 1 and 2 are complements. c. good I is normal, and good 1 and 2 are substitutes. d. good 1 is normal, and good I and 2 are complements. e. good 1 is normal, and good I and 2 are independent. 15. A perfectly competitive market has the following demand and supply: Q° = 90 – 5p Qs = 5p Suppose the government introduces a $4 subsidy on each unit sold. The total subsidy cost for the government will be a. $110 b. $140 c. $220 d. $330 e. $605
Let pi and p2 be the prices of good I and good 2, respectively, and let I be income. Which of the following is true of the following demand curve: q, = 60 – 3p; – 2p2 + 21? a. good 1 is inferior, and good 1 and 2 are substitutes. b. good I is inferior, and good 1 and 2 are complements. c. good I is normal, and good 1 and 2 are substitutes. d. good 1 is normal, and good I and 2 are complements. e. good 1 is normal, and good I and 2 are independent. 15. A perfectly competitive market has the following demand and supply: Q° = 90 – 5p Qs = 5p Suppose the government introduces a $4 subsidy on each unit sold. The total subsidy cost for the government will be a. $110 b. $140 c. $220 d. $330 e. $605
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
I need 14 and 15 please!!
![14. Let pi and p2 be the prices of good 1 and good 2, respectively, and let I be income. Which of the following
is true of the following demand curve: q, = 60 – 3p: – 2p2 + 21?
a. good 1 is inferior, and good 1 and 2 are substitutes.
b. good 1 is inferior, and good 1 and 2 are complements.
c. good 1 is normal, and good 1 and 2 are substitutes.
d. good 1 is normal, and good 1 and 2 are complements.
e. good 1 is normal, and good 1 and 2 are independent.
15. A perfectly competitive market has the following demand and supply:
QD = 90 – 5p
QS = 5p
Suppose the government introduces a $4 subsidy on each unit sold. The total subsidy cost for the
government will be
a. $110
b. $140
c. $220
d. $330
e. $605
16. Benji runs a coffee house. His customers love pumpkin spiced lattes, but will only drink them if they are
produced using a specific ratio of spiced coffee and sweet whipped cream. To produce one latte, q, the firm
needs to use 0.25 cup of spiced coffee, S, and 0.5 cup of cream, C. The price of 1 cup of spiced coffee is
Ps = 1, and the price of 1 cup of cream is pc = 1. The firm will produce pumpkin spiced lattes using the
cost-minimizing combination of coffee and cream. Which of the following equations describes the optimal
mix of spiced coffee and cream?
a. S=C
b. S=0.25C
c. S= 4C
d. S=0.5C
e. S= 2C
17. Ted Lasso spends all his on chips and pints. He has a Cobb-Douglas utility function with strictly convex
indifference curves. The graph below illustrates his budget constraint. Which of the following consumption
bundles could he choose in order to maximize his utility?
а. А
Pints
b. В
10
с. С
d. D
e. It is not possible to determine without more
information.
30
Chips](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4190dee4-6fef-466a-bb41-1eedbdd0bcd5%2F47fca915-2b7b-4ab8-9caf-1368ddd4fdcb%2Fvnx34mt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:14. Let pi and p2 be the prices of good 1 and good 2, respectively, and let I be income. Which of the following
is true of the following demand curve: q, = 60 – 3p: – 2p2 + 21?
a. good 1 is inferior, and good 1 and 2 are substitutes.
b. good 1 is inferior, and good 1 and 2 are complements.
c. good 1 is normal, and good 1 and 2 are substitutes.
d. good 1 is normal, and good 1 and 2 are complements.
e. good 1 is normal, and good 1 and 2 are independent.
15. A perfectly competitive market has the following demand and supply:
QD = 90 – 5p
QS = 5p
Suppose the government introduces a $4 subsidy on each unit sold. The total subsidy cost for the
government will be
a. $110
b. $140
c. $220
d. $330
e. $605
16. Benji runs a coffee house. His customers love pumpkin spiced lattes, but will only drink them if they are
produced using a specific ratio of spiced coffee and sweet whipped cream. To produce one latte, q, the firm
needs to use 0.25 cup of spiced coffee, S, and 0.5 cup of cream, C. The price of 1 cup of spiced coffee is
Ps = 1, and the price of 1 cup of cream is pc = 1. The firm will produce pumpkin spiced lattes using the
cost-minimizing combination of coffee and cream. Which of the following equations describes the optimal
mix of spiced coffee and cream?
a. S=C
b. S=0.25C
c. S= 4C
d. S=0.5C
e. S= 2C
17. Ted Lasso spends all his on chips and pints. He has a Cobb-Douglas utility function with strictly convex
indifference curves. The graph below illustrates his budget constraint. Which of the following consumption
bundles could he choose in order to maximize his utility?
а. А
Pints
b. В
10
с. С
d. D
e. It is not possible to determine without more
information.
30
Chips
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