The amount/limit of income a consumer has to spend on goods and services is known as O a budget constraint. wealth. O purchasing power. effective demand.
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The amount/limit of income a consumer has to spend on goods and services is known as O a budget constraint. wealth. O
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- The diagram below shows the Total Effect (the sum of Income & Substitution Effects) when the budget line moves from BO to BI, it shows that; Substilie. Effact Toral Effect O a. Price of X increase and X is Giffen good. O b. Price of X decreases and X is normal good. O c. Price of X increase and X is inferior good. Price of X incregse and X is normgl good.What price ÅSsuming do you line and budget that understand by line? Consumer has income of $180, which monthly he Spends Good' X on two commodities and Grood Y. The price l07 Good $13 and price of the is $24. What would ' be Combinations of Crood X is Various Good Y this combinations line regard? and in and write draw various budget according ly?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
- Total utility is maximized in the consumption oftwo goods by equating thea. prices of both goods for the last dollar spenton each good.b. marginal utilities of both goods for the lastdollar spent on each good.c. ratios of marginal utility to the price of bothgoods for the last dollar spent on each good.d. marginal utility of one good to the price ofthe other good.Maya divides her income between coffee andcroissanls (both of which arc normal goods). An earlyfrost in Brazil causes a large increase in the price ofcoffee in the U nitcd Stites.a. Show the eflcct ol the frost on Maya's budgetconstraint.b. Shm" the effect ol the frost on Maya's optinu,loonsumption bwl<ile assunling that the substitutioneflcct outweiglls the income effect for croiss:mls.c. Show the eflcct of the frost on Maya's optimalconsumption bw,dle assuming that the incomeeffect outweighs the substitution effect forcroissantsFigure#1 Pepsi Z. W Pizza Refer to Figure# 1. Which point in the figure showing a consumerâ s budget constraint represents the consumer's income divided by the price of a Pepsi?
- Answer quickly pleaseQUESTION 44 What is being described here? "The excess of utility from the consumption of one more unit of a good, over the price paid". O a. Marginal consumer surplus O b. The slope of the indifference curve O c. Marginal utility O d. Total utilityRefer to Figure 3 below. The consumer chooses A on budget line I1 and chooses B on budget line 12. Based on this information, which of the following rankings is able to describe the consumer's preferences on how he/she ranks the first is highest ranked and last is the lowest-ranked? Clothing I1 12 Food Figure 3 O a. The sequence is A-B-C-D O b. The sequence is A-B-D-C O c. NO correct answers because we do not have enough information to rank all four bundles. O d. The sequence is A-D-B-C
- The diagram shows Sam's budget line. Which of the following combinations of gasoline and coffee are available to Sam? 40 32 24 16 8 4 8. 12 16 20 24 Coffee (pounds per week) OA. 40 gallons of gasoline and 0 pounds of coffee. B. 32 gallons of gasoline and 4 pounds of coffee. OC. 8 gallons of gasoline and 8 pounds of coffee. OD. 16 gallons of gasoline and 16 pounds of coffee. OE. All combinations except (D) are available to Sam. Gasoline (gallons per week)This question concerns a person in an economy in which they only consumetwo commodities, coffee and cake. This person always consumes thesecommodities together in a fixed ratio; whenever they drink a cup of coffee, theyeat a single cake.This person has a budget of £99 to spend on coffee and cake. a. Price of coffee is £2 and the price of a cake is £1. ii. Price of coffee is £8 and the price of a cake is £1 iii. Price of coffee is £10 and the price of a cake is £1. b. Using the information from part a, draw an individual demand curve for coffee for this person. Briefly explain how you used the information frompart a to create the demand curve. c. Assume the price of coffee is £2 and the price of a cake is £1. This personnow decides to limit their consumption of coffee to one cup of coffee a dayand one cake a day. Discuss how this decision to limit their consumptioncontradicts the axioms of behaviour for consumption