Suppose that you are trying to determine whether or not your friend Rajiv views a pound of cheese as a necessity, a luxury, or in between a necessityand a luxury. Rajiv has a weekly income of s50 to spend on either cheese or other consumption. The price of cheese is $10 per pound, and the verticalaxis is treated as a composite good representing dollars spent on other consumption.On the following graph, use the blue line (circle symbol) to graph Rajiy's budget constraint (BC). Then, place the black point (plus symbol) on thegraph to indicate the best bundle in this case.Note: Dashed drop lines will automatically extend to both axes.10090вс,70Initial Best Bundle005040BC,3020New Best Bundie102.6.10CHEESE (Pounds per week)Now, suppose that Rajiv's weekly income increases to $100.Use the green line (triangle symbol) to graph the new budget constraint (BCa). Then, place the grey point (star symbol) on the graph to indicate thenew best bundle.According to the previous graph, a pound of cheese isTrue or False: Rajiv's preferences exhibit homothetic tastes.TrueFalseOTHER CONSUMPTION (Dollats per week)

Luxury Goods and Normal Goods Individuals spend a greater extent of their income on Luxury…

Answered: price or cheese is is treated as a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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b (I). Suppose Mania comes into some money and can now spend an extra$200 per month. Draw her new budget constraint. II. Suppose the price of restaurants decrease to $12, while her income andthe price of Cru is unchanged. Illustrate what happens to her budgetline.
7) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of crackers declines? The BC shifts to the left (down). The BC shifts to the right (up). The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a lower point. The BC rotates such that it intersects the horizontal axis at the same point as before and intersects the vertical axis at a higher point.
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Suppose that a household has a weekly budget of $200 a week for its weekly shopping trip when it spends its weekly budget on toilet paper priced at $0.50 per roll and other goods. a. Draw a large diagram showing the household's weekly budget constraint for rolls of toilet paper and $ of other goods. Label the axes, the intercepts, the budget constraint and give the diagram a title. b. If the toilet paper and other goods are perfect complements and the household is observed to buy 24 rolls of toilet paper per week, draw an indifference curve that indicates this situation. Label the household's demands for toilet paper rolls and other goods and its indifference curve. C. Suppose a quota is introduced limiting purchases of toilet paper to 12 rolls per weekly shop. On the diagram from a. and b., draw the household's budget constraint and the highest indifference curve the household can reach. Label the household's budget constraint, demand for toilet paper rolls and other goods and the…
A consumer's budget is 137. A unit of good x costs 3 and a unit of good y costs 4. If the consumer purchases 3 units of good y, how many units of good x can the consumer purchase? Please round your answer to two decimal places. Answer: Previous page 2028 P Type here to search 01/12/2021
a. Create a graph with X on the horizontal axis and Y on the vertical axis. The equation of the budget constraint is: 5X + 10Y = 500 We can rearrange this to solve for Y: Y = (500 - 5X)/10 b. Plot a graph with the point (50, 25), where they spend half their income on each good. c. If the household income doubles to Rs. 1,000, the new budget constraint would be: 5X + 10Y = 1000 Rearranging for Y: Y = (1000 - 5X)/10 d. If after the change the household spends Rs. 200 on Y and Rs. 800 on X, we can plug these values into the budget constraint to solve for X and Y: 5X + 10Y = 1000 5(800) + 10(200) = 1000 This equation is not satisfied, so we can conclude that the household cannot spend Rs. 800 on X and Rs. 200 on Y with the new budget constraint.
Henry has $450 to spend on movies and concerts. Suppose the price of a movie ticket is $15 and the price of a concert ticket is $90. Draw Henry's budget line. Your graph should include labels for your axes, and you should note the quantities at which the budget line meets each axis. Label Henry's budget line "BL" Next, suppose that the price of concert tickets drops to $75. Draw Henry's new budget line, and label it 'BL2'.
need quality answer Nuoya has $256 to spend on cherry and/or coconuts. The price of cherry is $12/kg and the price of coconuts is $17/kg. What is the slope of her budget line, if cherry is on the horizontal axis and coconuts are on the vertical axis? Round your answer to two decimal places, if necessary. Hint: is slope positive or negative?
Question: How We Can Check Convexity And Monotonicity Of The Utility Function. How we can check convexity and monotonicity of the utility function.
Consumer Theory Daniel spends all his money on only two goods: chocolates (good 1) and milkshakes (good 2). We have information about his purchases, income and prices for 4 weeks: A, B, C and D. For each week, the budget line and the goods bought are shown on the graph below. a) Suppose that Daniel’s preferences are transitive and satisfy "more is better". Shade all the bundles that you are certain are worse for Daniel than bundle A in one colour, and all the bundles that you are certain are better for Daniel than bundle A in a different colour. (You can use different patterns instead of colours.) Indicate which is which. Explain.
Consumer choiceJo buys muffins and cupcakes at a bakery. Jo’s weekly budget for baked goods is $70. The priceof muffins is $1.25. The price of cupcakes is $1.75.a) Write down Jo’s budget constraint: express the quantity of cupcakes as a function of thequantity of muffins.
Hira has Rs.1200 a week to spend on yogurt and mangoes. The price of yogurt is Rs.200, and mangoes are Rs.400 a box. (Hint: Quantity of mangoes to be plotted on the x-axis of the budget line) 1. Calculate the Y-intercept for the budget line. 2. Calculate the X-intercept for the budget line. 3. Calculate the slope of the budget line.

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