O A good is normal when a rise in income leads to a fall in the quantity consumed of that good. On the new budget constraint, a choice like C should be made if both goods are normal goods. Choice B if Product 1is an inferior good, and Choice D if Product 2 is an inferior good. O The new budget constraint line can be divided into four groups of choices.

O A good is normal when a rise in income leads to a fall in the quantity consumed of that good. On the new budget constraint, a choice like C should be made if both goods are normal goods. Choice B if Product 1is an inferior good, and Choice D if Product 2 is an inferior good. O The new budget constraint line can be divided into four groups of choices.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

39. The following chart shows thec total utility-that Ammar receives from çonşuming various amounts-of chocolate.candy bars each day: Number candy, bars consumed për đay Total'utility 1' 40- 2 70 90 100 4. 80 Which of the following statements about Ammar's marginal utility is correct? Hiş marginal utility from the first candy bar is greater-than his marginalutility from the second candy' bar
Which of the following is true about utility? O Utility same for all the consumers O Utlity is subjective Utility for a good is constant O Utlity is same as usefulness
1. Say that there are two goods in the world, books and video games. Say that we observed two of Jim's choices: he chooses bundle A from the budget set bounded by budget line 1, and the bundle B from the budget set bounded by budget line 2. video games B A budget line 2 budget line 1 books a) For each of the two goods, based on the diagram: is the good normal, inferior, or we can't say for sure? Is the good ordinary, Giffen, or we can't say for sure? Explain. b) For which of the two budget lines is the opportunity cost of a book higher and why? What does that statement mean in the context of this model?
X2 Phil has preferences over olives (x₁) and ice creams (x₂) with a utility function, u(x₁, x₂)= x₁0.5+ x₂0.5. Suppose his income is $16 and the price of olives is $1 and the price of ice creams is $1, too. Which of the following is TRUE? O The utility level when he spends all of his income on good 1 is 8. O The optimal bundle Phil will choose to consume is (6,10). O The utility level at a bundle (1,16) is 11. None of the above. The optimal bundle Phil will choose to consume is (8,8).
Suppose you had a budget of $20.00 and the prices of a burger and a slice of pizza are $5.00 and $2.00respectively. What would be your optimal consumption bundle