Refer to the budget line shown in the diagram below. If the consumer's money income is $20, the: 10 8. 4 6. 8. 10 Quantity of C prices of C and D cannot be determined. price of C is $2 and the price of D is $4. price of C is $4 and the price of D is $2. consumer can obtain a combination of 5 units of both C and D. Quantity of D 2.

Refer to the budget line shown in the diagram below. If the consumer's money income is $20, the: 10 8. 4 6. 8. 10 Quantity of C prices of C and D cannot be determined. price of C is $2 and the price of D is $4. price of C is $4 and the price of D is $2. consumer can obtain a combination of 5 units of both C and D. Quantity of D 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Sam has income of $2000 per month, and consumes two goods, housing and food. Apartments in her area cost $2 per square foot per month, while food costs $10 per meal. Sam receives news that rents are rising to $4 per square foot per month. a. Sketch Sam’s budget constraint before and after the price change. b. Sam’s utility is U=H1/2F1/2, where H is the square feet of housing she consumes and F is the number of meals she consumes. i. How large an apartment did Sam live in before the price change? How many meals did she consume? Show how you solved the problem. ii. How large an apartment will Sam move to now that rents are rising? How many meals will she consume? Show how you solved the problem c. In response to widespread hunger in Sam’s area, the government issues food debit cards to all residents, which automatically reload with $100 per month that can only be spent on food. Draw the change in Sam’s budget constraint (use the one where apartments cost $4 per square foot per month).
Luke has a monthly income of $80. He spends this money making telephone calls from home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans: Plan A: Pay no monthly fee and make calls for $0.50 per minute. Plan B: Pay a $30 monthly fee and make calls for $0.1 per minute. Graph Luke’s budget constraint under each of the two plans.
Give 5 examples each of inferior goods and normal goods
Price for good A is $6 and good b is $8. Budget is $36. Good A Good B Quantity Total Utility Quantity Total Utility 1 18 1 32 2 30 2 56 3 38 3 72 4 42 4 80 5 44 5 84 6 3 6 2 7 2 7 1 If the price of A decreases to $4, then the utility maximizing combination of the two products is what?
Solve the attachment. image
5. The price of good x increases from 4 to 6. A consumer with an income of 120 buys 15 units of good x before the change and 10 units after. If the same consumer kept their utility constant and minimized expenditure, they would buy 8 units of x after the price change. What are the total effect, substitution effect, and income effect?
A consumer who has spent all of her income on clothes and food and finds that her marginal-utility for clothes is 16 and marginal-utility for food is 20. If the price of clothes and food are both $4 . What should the consumer do for purchases to maximize total utility A. purchasing more clothes and less food B. purchasing more of both commodities C. purchasing less of both commodities D. purchasing more food and less clothes
15. Answer the following questions based on the table. a) Complete the given table. b) Draw the total and marginal utility curves from the complete table. c) Show the relationship between total and marginal utility curves. Units of goods Total Utility(TU) Marginal Utility (MU) 1 5 2 9 3 12 4 14 5 15 6. 15 7 14
The nearby graph shows Charlie's budget constraint for purchases of shoes and purses. Number of 12 purses 10 8 6 4 2 0 Your answer Budget line with discount Budget line no discount 0.5 1 1.5 2 2.5 Number of pairs of shoes If Charlie's monthly budget for shoes and purses is $100 and they buy more than 2 purses, the price of purses is $. _. (Enter your answer as integers without the dollar sign.)
4. John has a utility for the quantity of sandwiches, Xs, and quantity of burgers, Xp, that he consumes, represented by the following equation: U(X,X) = XX His income is Y = $24. The price of a sandwich changes from X, = $1 to X, = $4 while the price of a burger remains at X, = $6. Solve for the compensating variation and equivalent variation associated with this price increase.
c. Samuelson maximizes his utility by spending his entire income of $29 on video 3.5 games and cards. The price of video games is $4, and he buys 2 games. The marginal utility from the last card he buys is 42. The table represents Samuelson's marginal utility from each good. Marginal utility Quantity Video Games Cards 1 45 70 28 54 3 16 42 4 10 16 Required: i. Calculate the price of a card using the condition that Samuelson's marginal utilities per dollar are equal. ii. What is Samuelson’s total utility?
6 If someone has an income of 20 and he wants to buy Pepsi and hamburgers. Hamburgers are sold in an unusual way. There is only one supplier and the more hamburgers he buys, the higher the price per unit. So, hamburgers cost is a total of 2h^2 (squared) for hamburgers. Pepsi is sold at a price of $2. 1. In this case, write out the budget constraint of hamburgers and Pepsi. 2. His utility function is u(h,p) = 12h + 4p. Draw his 1) budget line and 2) a few indifference curves on a graph. 3. What is the optimal bundle for him?