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Define : Substitute goods; Complementary goods; IRR
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- Discuss the possible substitution effect and the income effect of an increase in income on leisure time.When the price of goods X = IDR 10, the quantity demanded is 5. When the price of goods X = IDR 15, the quantity demanded is 7.True/false?Food Stamp Program a. We have two goods; x1 indicating foods and x2 indicating non-food items. Consider the following six Food Stamp programs designed for six types of family based on their daily income. For each of the Food Stamp programs, if the maximum no. of food stamp is 50, draw the original budget line (before Food Stamp program is introduced) and the budget line after the implementation of Food Stamp program. Program No. Daily Income (Tk.) Food Stamp price Market price of alloted foods 1 0 - 5000 Tk. 0 Tk. 200 2 5001 - 10000 Tk. 20 Tk. 200 10001 - 15000 Tk. 50 Tk. 200 4 15000 - 20000 Tk. 100 Tk. 200 5 20000 - 25000 Tk. 150 Tk. 200 25000 + Tk. 200 Tk. 200 3. 6
- Consider a model where a consumer, Mehdi, is deciding how to allocate their 24 hours each day between work and leisure. The take-home wage they initially receive is w = 15, but following a rise in income tax, their take-home pay falls to w = 12. Following this change in the wage rate, the budget constraint changes from the blue line to the red line. Mehdi reallocates his time between work and leisure, as shown in the diagram below: Composite good 0 L₁ L2 L3 Time Constraint 24 Leisure (0-24)/ Work (24-0) Given this information, which of the following conclusions can we reach? The substitution and income effects both cause Mehdi to take more leisure time, meaning leisure is an inferior good. The substitution effect causes Mehdi to take more leisure time, while the income effect causes Mehdi to take less leisure time, meaning leisure is a normal good. The substitution effect causes Mehdi to take more leisure time, while the income effect causes Mehdi to take less leisure time, meaning…Please no written by handWhen price of X double and the price of Y also double, the slope of the budget line doubled. the real income of X and Y doubled. the budget line remains unchanged. the relative price of X and Y remains unchanged.
- Ask all and explain please!Please refer to the following information to answer the question (in bold) below: • You have $400 allocated for your monthly food budget. • You can either purchase meals at a restaurant (R) or buy groceries (G) to prepare food at home. • The price of restaurant meals is $8/meal (PR= $8). • The price of groceries is $2/pound of food (PG= $2). Suppose that the price of restaurant meals rises to $10/meal (PR = $10). Choose the answer below that best characterizes the accuracy or inaccuracy of the following statements: A. If we assume that restaurant meals are the vertical axis good, the increase in PR flattens the slope of the budget constraint. B. Compared to when PR $8, the y-intercept of the new budget constraint is larger in value. C. Relative to when PR = $8, the consumer can now buy more groceries for each restaurant meals she or he forgoes purchasing. D. The affordable set when PR = $10 includes more bundles than when PR = $8. Statements A and B are True, C and D are False…If we assume the sizes of the slopes are known, and if we apply an assumption for a given level of income and for the prices of a related good, how does equation Qd =B+BxPx+BmM+ByPy collapse into equation Qd =B+BxPx?
- You are analyzing the purchasing decisions of students. You are focusing on the quantity of tablet computers purchased by a particular student. The price of tablet computers is $228 each. The other good in your model is a composite good. To purchase one more tablet computer, the student must give up ? units of the composite good.2.27 The Chuzzlewits have an income of $m per week. Let x be food and let y be all other goods. Let px be the price of food and py be the price of other goods. They can use food stamps to buy food at a price of px(1s) for up to x* units of food per week. If they buy more food than x*, they have to pay the full price, px for additional units. Their weekly income is greater than px(1 s)x. The maximum amount of food that they can buy per week is: (a) x +(m=px) (b) (m + x)=px (c) (m=px)+sx (d) m=(1 s)px (e) (m + px)=(1 s)p answer is c, please show workingWhen there is a mixed economy, which of these is not allocated by the market? A) None of the above B) wheat C) libraries D) caffeinated drinks E) steel
