Please draw 4 simple graphs for me to show the movements of the indifference curves or budget lines. Imagine a market of food (y axis) and energy (x axis). shwo the the optimal level of consumption of food and energy on an indifference curve an energy bill support scheme giving households a discount on energy bills in the form of an INCOME SUBSIDY Remove the subsidy and now decrease energy prices by 10% whilst food prices remain constant from the original graph show the impact of a subsidy to producers resulting in a reduction of both energy prices and food prices by 10% for each explain how much of the change in quantity of each good consumed is due to an income effect and how much to a substitution effect?
Please draw 4 simple graphs for me to show the movements of the indifference curves or budget lines. Imagine a market of food (y axis) and energy (x axis). shwo the the optimal level of consumption of food and energy on an indifference curve an energy bill support scheme giving households a discount on energy bills in the form of an INCOME SUBSIDY Remove the subsidy and now decrease energy prices by 10% whilst food prices remain constant from the original graph show the impact of a subsidy to producers resulting in a reduction of both energy prices and food prices by 10% for each explain how much of the change in quantity of each good consumed is due to an income effect and how much to a substitution effect?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please draw 4 simple graphs for me to show the movements of the indifference curves or budget lines. Imagine a market of food (y axis) and energy (x axis).
- shwo the the optimal level of consumption of food and energy on an indifference curve
- an energy bill support scheme giving households a discount on energy bills in the form of an INCOME SUBSIDY
- Remove the subsidy and now decrease energy prices by 10% whilst food prices remain constant
- from the original graph show the impact of a subsidy to producers resulting in a reduction of both energy prices and food prices by 10%
for each explain how much of the change in quantity of each good consumed is due to an income effect and how much to a substitution effect?
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