Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
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Chapter 6, Problem 4SCQ
As a college student you work at a part-time job, but your parents also send you a monthly “allowance.” Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?
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Chapter 6 Solutions
Principles of Economics 2e
Ch. 6 - Jeremy is deeply in love with Jasmine. Jasmine...Ch. 6 - Take Jeremys total utility information in Exercise...Ch. 6 - Explain all the reasons why a decrease in a...Ch. 6 - As a college student you work at a part-time job,...Ch. 6 - Who determines how much utility an individual will...Ch. 6 - Would you expect total utility to rise or fall...Ch. 6 - Would you expect marginal utility to rise or fall...Ch. 6 - Is it possible for total utility to increase while...Ch. 6 - If people do not have a complete mental picture of...Ch. 6 - What is the rule relating the ratio of marginal...
Ch. 6 - As a general rule, is it safe to assume that a...Ch. 6 - Why does a change in income cause a parallel shift...Ch. 6 - Think back to a purchase that you made recently....Ch. 6 - The rules of politics are not always the same as...Ch. 6 - Income Effects depend on the income elasticity of...Ch. 6 - Praxilla, who lived in ancient Greece, derives...Ch. 6 - If a 10 decrease in the price of one product that...
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Similar questions
- Does the income level of a person change their view of substitute goods?arrow_forwardIf a consumer's income decreases, what will happen to the budget line? It will shift outward. It will become steeper. It will become flatter. It will shift inward.arrow_forwardWhy do people purchase more of something when its price falls?arrow_forward
- Explain how changes in income (budget constraint) and prices affect consumer consumption choices. Think back to a purchase that you made recently. How did you evaluate whether or not you would be purchasing the item?arrow_forwardA consumer has a budget to spend on Shoes and Socks. At their current levels of consumption, they spend their entire budget and receive 0.60 marginal utility per dollar from Shoes and 0.40 marginal utility per dollar from Socks. How should they change their consumption to maximize their utility? Buy more Shoes and fewer Socks. Buy only Shoes, and no Socks. Buy more Shoes and more Socks. Buy only Socks, and no Shoes. Buy fewer Shoes and more Socksarrow_forwardTrue or false. A budget constraint, budget line or budget set is a graphical way to illustrate all possible combinations of two goods that a person can afford.arrow_forward
- Discuss Budget linearrow_forwardUsing the consumer choice theory, explain how an individual decides what combination of different products to buy?arrow_forwardThink back to a purchase that you made recently and respond to the following: How would you describe your thinking before you made that purchase? Did you have any budget constraints? If so, what were they? Would you have made the purchase if the price had increased? Why or why not?arrow_forward
- When a consumer is below the budget line, what does it mean?arrow_forwardLuke has a monthly income of $80. He spends this money making telephone calls from home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans: Plan A: Pay no monthly fee and make calls for $0.50 per minute. Plan B: Pay a $30 monthly fee and make calls for $0.1 per minute. What baskets might he purchase if Plan B is better for him?arrow_forwardYou have just opened a new grocery store. Every item you carry is generic (generic beer, generic bread, generic chicken, etc.). You recently read an article in the Wall Street Journal reporting that the price of recreation is expected to increase by 15 percent. How will this affect your store’s sales of generic food products?arrow_forward
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