Steve allocates his budget of $24 per week among three goods. Use the following tableof the marginal utilities for Good A, Good B, and Good C to answer the questionsbelow:Q(A) MU(A) Q(B) MU(B) Q(C) MU(C)15017512524026022033034031542043041051552057.5If the price of A is $2, the price of B is $3, and the price of C is $1, how much of eachwill Daniel purchase in equilibrium?If the price of A rises to $4 while the other prices and Daniel's budget remainunchanged, how much of each will he purchase in equilibrium?

Our analysis demonstrates that Steve's consumption choices are guided by the principle of marginal…

Answered: Steve allocates his budget of $24 per…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ECONOMICS LECTURE NOTE 5.1.3 Example Use the table below to answer the questions that follows Commodity x Quantity Commodity y Quantity Marginal utility 60 Average utility 1 30 2 50 2 27 3 35 3. 22 4 15 4. 18 5 5 15 6. 6. 12 iii. Which of the commodities would he pay higher price when 4 units are consumed? Suppose the price of X is 5 and that of Y is 4. How many of the quantity of X and Y should be consumed in order for the consumer to be in iv. equilibrium. If price of X increase to 10 whiles that of Y remains the same, explain how the equilibrium conditions will behave.
The graph represents a budget constraint showing the purchases of Good X and Good Y. If the price of good X falls, then budget constraint will move from budget constraint
Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys more beer when the price of beer goes up, then beer must be an inferior good for Frodo. If, on the other hand, he buys less beer when the price of beer goes up, then beer must be a normal good for Frodo. Sofia disagrees: "Normal and inferior goods are about income changes, not price changes. Therefore, we do not have enough information: beer could be an inferior or normal good in either of these cases." Do you agree or disagree? Carefully explain your point of view. Support your argument with graphs of income, substitution and total effects (please put beer on the horizontal axis and the other goods on the vertical axis). Please assume that Frodo's preferences over beer and other goods are strictly convex and satisfy "more is better" assumption.
Joy’s budget permits her to spend $5,000 per month on either business travel or electronicmedia to transact business. The price of business travel was initially $1,000 per trip and theprice of electronic media was $500 per hour.a) Graphically sketch Joy’s budget line. b) Graphically illustrate how a 20 percent decline in the price of business travel would impact Joy’s budget set.c) Suppose that, after the price of business travel drops, Joy’s marginal rate of substitution between electronic media and business travel -1. Is she allocating resources efficiently? Explain.
12. Five consumers have the following marginal utility of apples and pears: Marginal Utility Marginal Utility of Apples of Pears Claire 6 12 Phil 6 6 Haley 6 3 Alex 3 6 Luke 3 12 The price of an apple is $1, and the price of a pear is $2. Which, if any, of these consumers are optimizing their choices of fruit? For those who are not, how should they change their spending?
8.4 (0) Maude spends all of her income on delphiniums and hollyhocks. She thinks that delphiniums and hollyhocks are perfect substitutes; one delphinium is just as good as one hollyhock. Delphiniums cost $4 a unit and hollyhocks cost $5 a unit. (a) If the price of delphiniums decreases to $3 a unit, will Maude buy more of them? due to the income effect and what part is due to the substitution effect? What part of the change in consumption is (b) If the prices of delphiniums and hollyhocks are respectively Pa = 84 and P, = $5 and if Maude has $120 to spend, draw her budget line in blue ink. Draw the highest indifference curve that she can attain in red ink, and label the point that she chooses as A. Delphiniums 40 30 20 10 30 Hollyhocks 10 20 40 (c) Now let the price of hollyhocks fall to 83 a unit, while the price of delphiniums does not change. Draw her new budget line in black ink. Draw the highest indifference curve that she can now reach with red ink. Label the point she chooses…
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Assume that Raymond has $ 37.00 to spend on pretzels and beer. The price of pretzels is $3.00 and the price of beer is $5.00. Marginal utilities for each good are given below. Units MU P MU P / P P MU B MU B / P B 1st 18 6 40 8 2nd 15 5 30 6 3rd 12 4 25 5 4th 9 3 20 4 5th 6 2 15 3 6th 3 1 5 1 What Quantity of pretzels will Raymond purchase?
The following graph shows Dmitri's weekly demand for pizza, represented by the blue line. Point A represents a point along his weekly demand. The market price of pizza is $3.00 per slice, as shown by the horizontal black line. Dmitri's Weekly Demand 7.50 6.75 6.00 5.25 Demand 8, 3.75 4.50 3.75 Price 3.00 2.25 1.50 0.75 0 2 4 8 10 12 14 16 18 20 QUANTITY (Slices of pizza) PRICE (Dollars per slice)
Typed answer.
Consider the following table, which listsJames’s marginal utility schedule for steak andhamburger meals: Given a budget of $45, how many steak and hamburgermeals will James buy per month to maximizehis total utility? What is the total utilityrealized?
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