Foundations of Economics (8th Edition)
Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 13, Problem 6MCQ
To determine

Choose the correct answer from the following options: When Joe's budget increases, he will spend the increase in his budget on ____

  1. Normal Goods
  2. Inferior Goods
  3. More of all the goods he usually buys
  4. Essential Goods

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Quantity of cola 600 400 300 Quantity of pizza 200 A consumer has a total budget of $800 to spend on pizza and cola. 1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line. 2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his budget line?
26. If we observe that a consumer's budget constraint has shifted inward, we can assume that the consumer will buy a. more normal goods and fewer inferior goods b. fewer normal goods and more inferior goods C. more normal goods and more inferior goods d. fewer normal goods and fewer inferior goods
Q43 Laurie spends all of her money buying bread and cheese. The marginal utility she receives from the last loaf of bread is 60 and from the last block of cheese is 30. The price of bread is $3 and the price of cheese is $2. Laurie... a. Should buy more cheese and less bread to maximise her utility. b. Should buy more bread and more cheese in order to maximise her utility. c. Spends too much money on bread and cheese. d. Should buy more bread and less cheese in order to maximise her utility. e. Is buying currently the utility-maximising amount of bread and cheese.
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