Question 3. Assume that there are two goods. The price of the first good is $10, the price of the second good is $5. The income is m=200. For the following read section 2.6. In all the cases below determine the equation of the new budget line, the intercepts, and the slope (always starting from the initial level of prices and income given above). · The government imposes a quantity tax of 2 Dollars on good 1; · The government imposes a value tax of 20% on good 1. · The government pays a quantity subsidy of 1 Dollar on good 1. · The government pays a lump sum subsidy of 40 Dollars.

Question 3. Assume that there are two goods. The price of the first good is $10, the price of the second good is $5. The income is m=200. For the following read section 2.6. In all the cases below determine the equation of the new budget line, the intercepts, and the slope (always starting from the initial level of prices and income given above). · The government imposes a quantity tax of 2 Dollars on good 1; · The government imposes a value tax of 20% on good 1. · The government pays a quantity subsidy of 1 Dollar on good 1. · The government pays a lump sum subsidy of 40 Dollars.

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

Please send me answer within 10 min!! I will rate you good for sure!! Please send me typed answer!!
. (Figure 4.13) What rotated the budget constraint? Quantity of good Y 10 9 8 7 6 5 N WAS 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 Quantity of good X an increase in the price of good X a decrease in income an increase in the price of good Y a decrease in the price of good Y
Answer the questions. Please draw graphs, instructions on word for how to draw the graph is not enough. Let X1 on the horizontal axis and X2 on the vertical axis. (a) Suppose two ordinary goods X1 and X2 are substitutes in consumption. Using BLs and ICs, graphically derive the demand curve for X1. Explain your graph.(b) If X2 is a Giffen good, how to derive the demand curve for X2?(c) Is the inferior good the same as the Giffen good? Why or why not?
If the consumer income is OR 568, price of good (X) is OR 81.3 and the price of good (Y) is OR 33.7, what is the quantity of good (Y) purchased by the consumer if he is only purchasing good (Y). Select one: a. 6.99 b. 0.14 c. 0.06 d. 16.85
Assume we are measuring coffee on the horizontal axis and flowers on the vertical axis. The government introduces a tax on coffee consumed beyond C* units. What will happen to the budget constraint? O The budget constraint will become kinked at C* units of coffee and will have a flatter slope at units beyond C*. O The budget constraint will pivot inwards around the horizontal intercept. O The budget constraint will pivot outwards around the vertical intercept. O The budget constraint will shift outwards and become steeper. O The budget constraint will become kinked at C* units of coffee and will have a steeper slope at units beyond C*. O No answer.
In the figure to the right, the current position of the demand curve for a good is D₁, and the price of the good, which is a normal good, is $4. If there is an increase in consumer incomes, which way will the demand curve shift? Will the quantity demanded of the good increase or decrease? 1.) Using the line drawing tool, draw the new demand curve for a normal good after consumer incomes increase. Label this line 'D₂.' 2.) Using the point drawing tool, indicate the point on the new demand curve, D₂, that corresponds to the quantity demanded when the price is $4 per good. Label this point 'A₂. Carefully follow the instructions above, and only draw the required objects. Price per Unit of the Good ($) 2A₁ D₁ 6 7 8 9 10 Quantity of the Good Demanded
Derive and plot Madeline's demand curve for Coke if she views Coke and Pepsi as perfect substitutes. (Hint: The quantity of Coke consumed where the budget line hits the Coke axis is Y/Pc, where pc is the price of Coke, pp is the price of Pepsi, and Y is income.) Use the 3-point curved line drawing tool to draw Madeline's demand curve for Coke. To simplify the analysis, assume that if the price of Coke and the price of Pepsi are equal, then Madeline, though indifferent between the two, only consumes Coke. Label this curve 'Demand'. Carefully follow the instructions above, and only draw the required objects. C Price/can of Coke Pp Y Pc Coke, Cans per year
In the below figure, a consumer is initially in equilibrium at point C. The consumer's income is $750, and the budget line through point C is given by $750 = $150X + $375Y. When the consumer is given a $ 300 gift certificate that is good only at store X, she moves to a new equilibrium at point D. a. Determine the prices of goods X and Y. Price of X: $ 150 Price of Y: $ 375 b. How many units of product Y could be purchased at point A? rmal or an inferior good? Product Y c Product X F
05- Income and Substitution Effects Question 6
1-a Answer following questions by using the Cobb-Douglas utility function u= xx and assuming that the price of good 1 is pi and good 2 is p2. Assume 00, p2>0, and income I>0.
Imagine two goods, x and y, with a given budget of 10 pesos. Prices of good x and y are P2 and P3 respectively. Suppose the price of good x increase by P2. What happened to the consumer’s utility? Select one: a. Budget line will pivot to the right and consumption of good x will decline b. Budget line will shift to the right and consumption of good x will decline c. Budget line will shift to the left and consumption of good x will decline d. Budget line will pivot to the left and consumption of good x will decline
Don't use pen or paper