-sume 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 the budget constraint? The budget constraint will become kinked at C" units of coffee and will have a flatter slope at units beyond C". 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 Cº. O No answer.

-sume 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 the budget constraint? The budget constraint will become kinked at C" units of coffee and will have a flatter slope at units beyond C". 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 Cº. O No answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 2 Consider a consumer named Ahmed who buys only two items, shawarma and coffee. If the total weekly income of Ahmed is OMR 36 and the price of shawarma is 2 OMR while price of coffee is 1.2 OMR, If he chooses to buy 12 quantities of shawarma, then how much quantity of coffee he can buy? O a. 12 Ob.0 O. 18 Od. 30
2. Zhoran has a budget of $36 for fruit. Strawberries cost $4 per pound and grapes cost $3 per pound. She likes both type of fruit and she has a diminishing marginal rate of substitution. (a) Draw a diagram illustrating Zhoran's budget constraint. Label both intercepts with their numerical values. What is the slope of her budget line? (b) Illustrate Zhoran's optimal combination of strawberries and grapes on your dia- gram. Any picture that is consistent with the facts described here is acceptable. Explain how your diagram demonstrates that the point you've chosen is the op- timal point for Zhoran. (c) Suppose Zhoran's budget increases to $48. How will this change her consumption decision? Illustrate your answer on your diagram and explain your picture.
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. TOTAL AND MARGINAL UTILITY E UTILITY CALCULATIONS Reset Total Utility Quantity Consumed Total Marginal Utility 70 Utility 60 50 22 40 1 22 30 18 20 2 40 10 14 3 4 6 8 3 54 Quantity Consumed Marginal Utility 10 20 4 64 6. 10 70 4 6. -10 72 -20 -2 Quantity Consumed 70 Quantity Consumed -6 8 64 2. 4 6 8
Graphical and Intuitive Optimization Consider a consumer who must allocate their available income between the consumption of two goods, Beer and Pizza. Their preferences over Beer and Pizza adhere to the usual assumptions we have made about preferences. The indifference curve map below reflects their preferences and the budget constraint reflects current income and prices. In the simplest terms possible, define or explain the term "Marginal Utility of Beer" (MUB). In the simplest terms possible, define or explain the term "Marginal Rate of Substitution of beer for pizza" (MRSBP). In the simplest terms possible, intuitively explain the meaning of MUB/PB, where PB represents the price of one unit of Beer.
4. What is the difference between substitution and complementary goods? Give an example for each goods! What will happen to quantity demanded of X if a price of substitutes goods decreased and to quantity demanded of Y if a price of complements goods decreased? Show with graph!
40. What is a budget constraint? Select one: o a. A limited amount of income available to consumers to spend on goods at given prices of goods Ob. The amount of money necessary to purchase a given combination of goods. c. The amount of income that gives equal marginal utility per dollar. Cd. The amount of income that must be spent on goods and services in order to maximize utility from consumption. Clear my choice
Course dashboard Which of the following is TRUE? Lütfen birini seçin: O A. If bundles A and Blie on the budget constraint, we can say that the household has the same utility from consumption of the two bundles. O B. If price of one good increases without any other changes, the budget constraint will shift outward with the same slope. O C. Slope of an indifference curve is called as "Marginal Rate of Technical Substitution" O D. Points below a budget constraint are unattainable. O E. If the money income decreases without any other changes, the budget constraint will shift inward with the same slope.
Marginal utility is O a. the extra satisfaction derived from consuming an additional unit of a good. Ob. the total satisfaction derived from consuming an additional unit of a good. O c. the total satisfaction derived from consuming a good. d. the change in total satisfaction as an additional unit of a good is consumed. O e. a and d
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If a consumer consumes two goods, A and B, and the price of A falls, then the income effect would cause the consumer to: O a buy more A and less B. O b. buy less A and more B Oc. buy less A and less B. O d. buy more A and more B
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