b.IC2IC1B1B0Figure 2 Referring to the graph below (Figure 2) showing a consumer's initial budget line (labeled BO)and new budget line (labeled B1) for two goods, X and Y, and two different indifferencecurves (IC1-IC2).B1B0Figure 2Consider the shift in the budget line from B0 to B1. Which of the following statements iscorrect?O a. Goods X and Y are substitutes.O b. Goods X and Y are complements.O c. Goods X and Y are neither substitutes nor complements.

Referring to the graph below (Figure 2) showing a consumer's initial budget line (labeled BO and new budget line (labeled B1) for two goods, X and Y, and two different indifference curves (IC1-IC2). IC1 B1 B0 Figure 2 Consider the shift in the budget line from BO to B1. Which of the following statements is correct? a. Goods X and Y are substitutes. O b. Goods X and Y are complements. O c. Goods X and Y are neither substitutes nor complements

Referring to the graph below (Figure 2) showing a consumer's initial budget line (labeled BO and new budget line (labeled B1) for two goods, X and Y, and two different indifference curves (IC1-IC2). IC1 B1 B0 Figure 2 Consider the shift in the budget line from BO to B1. Which of the following statements is correct? a. Goods X and Y are substitutes. O b. Goods X and Y are complements. O c. Goods X and Y are neither substitutes nor complements

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Mr. Odde Ball enjoys commodities x and y according to the utility function U (x, y) x² + y² (i). Maximize Mr. Ball's utility if px = $3, py= $4, and he has $50 to spend. (ii). Graph Mr. Ball's indifference curve and its point of tangency with his budget constraint. What does the graph say about Mr. Ball's behavior? What is the optimal bundle that maximizes Mr. Ball's utility? =
7. MRS and utility maximization Suppose your classmate Eleanor loves to eat dessert-so much so that she allocates her entire weekly budget to apple crisp and pie. The price of one bowl of apple crisp is $1.00, and the price of a piece of rhubarb pie is $3.00. At her current level of consumption, Eleanor's marginal rate of substitution (MRS) of apple crisp for pie is 3. In other words, Eleanor is willing to sacrifice three bowls of apple crisp for one piece of pie per week. Does Eleanor's current consumption bundle maximize her utility? That is, does it make her as well off as possible? If not, how should she change it to maximize her utility? Eleanor could increase her utility by buying more apple crisp and less pie per week. O Eleanor's current bundle maximizes her utility, and she should keep it unchanged. O Eleanor could increase her utility by buying less apple crisp and more pie per week.
8) 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 cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. The BC shifts to the right (up).
16. A consumer's utility only depends on the consumption of goods A and B according to the following Cobb-Douglass utility function: U(A,B) = A1/5 B4/5. The price of goods A and B are $5 and $10, respectively. The consumer has a budget of $300 that he can use to consume the two goods. a. Write down the budget constraint and plot it. b. Calculate the optimal bundle and maximized utility for the consumer. c. Price of good B increases by 20%. Compute the new optimal bundle of good A and B for the same consumer. What is the utility loss due to the price increase? d. Plot a linear approximation of the demand function for good B based on your answers above and show the dollar equivalent of the utility loss under the demand function.
Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 (completeness, more is better, diminishing marginal rate of substitution, and transitivity) are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good, and the price of good X increases. Then the substitution effect will lead consumers to consume Multiple Choice O more of good X and more of good Y. Oless of good X and more of good Y. O less of good X and less of good Y. more of good X and less of good Y.
8. Normal and inferior goods Antonio likes going to the ballpark to watch baseball, and he also is fond of going to the theater to listen to the symphony orchestra. The following diagram shows two of Antonio's indifference curves for going to ballgames and symphonies. With Antonio's initial budget constraint (BC1), he chose to go to four symphonies and six baseball games per month (point X). Then his budget constraint shifted to BC2, and he chose to go to five symphonies and three ballgames per month (point Y). BALLGAMES 3 8 10 0 4 5 SYMPHONIES BC 8 BC 10 ? Of the following choices, which could have shifted Antonio's budget constraint from BC₁ to BC2? Check all that apply. His income increased while the prices of baseball and symphony tickets stayed the same. The prices of both baseball and symphony tickets increased while his income stayed the same. His income decreased while the prices of baseball and symphony tickets stayed the same. normal The price of symphony tickets increased…
do parts a,b,c,d for me and explain too because I don't know. thanks
Joan has the following utility function U = 4x + 4y. a. Describe her preferences for these two goods. b. Draw a consumer choice graph describing her indifference curve when income is $120, the price of x is $5 and the price of y is $4. C. Draw the demand for x as the price falls to $4.01, and then to $3.99, and then to $3. Describe or illustrate in a graph the income and substitution effects as the price of x falls.
2)Ben is choosing between cookies and soda. Denote the marginal utility of cookies is MUc, and the marginal utility of soda is MUs. Which of the following relationship is true regarding the marginal utility of substitution (MŘS) of cookie in terms of soda? A) MRS= MUc B) MRS = MUS C) MRS = MUS / MUC D) MRS = MUc / MUs
Solve all this question......you will not solve all questions then I will give you down?? upvote.....
the second part of the question
1 . Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? Assume the government imposes an effective minimum wage (i.e., one above the equilibrium wage rate that would otherwise prevail in that market). Our supply and demand analysis implies? If preferences for pizza increase and the price of labor to produce pizza decreases, the equilibrium quantity of pizza will ____ and the equilibrium price of pizza will _____ .? Assume an intertemporal budget constraint that shows how consumption can be traded off between…