Now suppose that income goes up to 15oo. Illustrate how the budget constraint will change. If both goods are normal, explain where the new equilibrium will be (your answer might consist of a region of bundles, rather than just one bundle).

Q: Charles consumes only beer (x) and wine (y). His preferences can be represented by the following…

A: Given; Utility function; U=2xy Price of beer; px=2 Price of wine; py=2 a) Marginal rate of…

Q: Assume that Talib has well-behaved preferences and consumes hamburgers (vertical axis) and steak…

A: When the price(P) of a normal good(here, steak) falls, its quantity demanded rises. It can be split…

Q: Burritos Quantity per week 0 1 2 3 5 6 Total utility 0 21 39 54 63 69 72 Quantity per week 0 1 2345O…

A: Total utility refers to the overall satisfaction or pleasure that a consumer derives from consuming…

Q: 5. Janice consumes two goods, X and Y. Janice has a utility function given by the expression:…

A: Indifference curves are the graphical representation of various levels of utility. A budget line…

Q: Jerry spends his entire budget on bread and gasoline. His preferences are complete, transitive,…

A: Substitution Effect: This refers to the change in quantity demanded of a good or service as a result…

Q: What happens to consumer expenditure for both inelastic and elastic goods when the price increases?…

A: A broad measure of an economic variable's responsiveness to changes in other economic variables is…

Q: suppose you have a fixed income of $3000 per month and you want to allocate your budget between two…

A: Monthly income (M)= $3000Price of good x (Px) =$10 per unitPrice of good y (Py)=$20 per unit.Budget…

Q: Alex wants to maximize his utility. At his current level of consumption, Alex's marginal utility…

A: Marginal utility refers to the satisfaction that an individual attains when there is an additional…

Q: Draw the consumer’s budget constraint (put mask on the horizontal axis). What is the slope of this…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A consumer has the following utility function: Ulx, y) = xy -y: *21 where x and y represents the…

A: Substitution effect refers to substituting the consumption of the consumer from one good to another…

Q: 2. Suppose John's utility function is UX,Y) = 4VXY , where X is consumption of beer and Y is…

A: A good has diminishing marginal utility when marginal utility decreases with increase in units of…

Q: 13. Shawn likes to consume pineapple smoothies and hotdogs. His preferences are represented by the…

A: Consumer surplus is the economic benefit or value that consumers receive when they are able to…

Q: Muhammad's demand for fresh fish is perfectly income inelastic, and his income increases. If…

A:

Q: Hanan consumes two fruits: bananas (B) and apples (A). She has decided that her monthly budget for…

A: equation of budget constraint  B*pB + A*pA = income and intercepts are determined dividing income…

Q: Ria earns an income of $2,000 per month Assume that she can either buy 5 laptops or 10 mobile phones…

A: A utility function is a mathematical formula that outlines a person's preferences for various…

Q: A consumer’s weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is…

A: “Since you have asked multiple questions, we will solve the first question for you. If you  want any…

Q: 4. Emma consumes apples and bananas only. Her utility function is given by u(XA,XB) = XAXB. The…

A: a. Budget line equation I = (PXA)XA+ (PXB)XB 40 = 1XA + 2XB            ................ (i) The…

Q: The following table shows the amounts of additional satisfaction (marginal utility) that Ross would…

A: