Homework Answers
First Budget Constraint -
Price of books = $3
Price of magazines = $5
Income = $150
Maximum number of books that can be purchased = $150/$3 = 50 books
Maximum number of magazines that can be purchased = $150/$5 = 30 magazines
Second Budget Constraint -
Price of books = $5
Price of magazines = $5
Income = $150
Maximum number of books that can be purchased = $150/$5 = 30 books
Maximum number of magazines that can be purchased = $150/$5 = 30 magazines
Third Budget Constraint -
Price of books = $7.50
Price of magazines = $5
Income = $150
Maximum number of books that can be purchased = $150/$7.50 = 20 books
Maximum number of magazines that can be purchased = $150/$5 = 30 magazines
Fourth Budget Constraint -
Price of books = $15
Price of magazines = $5
Income = $150
Maximum number of books that can be purchased = $150/$15 = 10 books
Maximum number of magazines that can be purchased = $150/$5 = 30 magazines
Following figure shows the budget constraints -
Following figure shows the Price Consumption curve -
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A consumer is choosing between magazines and books. His indifference curves are shown on the graph...
X Concept: Indifference Curves 2 The graph to the right thustrates Jessio's preferences for pizza and...
X Concept: Indifference Curves 2 The graph to the right thustrates Jessio's preferences for pizza and Coke using indifference curves bb, and Use the point drawing tool to indicate a bundle of pur and Coke that Jessica would prefer to bundle A Bundle B), a bundle for which Jessica would be interent with bundle A (Bunda C), and a bundle that would be inferior to hundie A (Bundle Dj Draw each bunde such that corresponds to a level of utility...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved line drawing tool to draw two additional indifference curves each tangent to a different budget constraint reflecting the effects of changing income on goods X and Y. Properly label these indifference curves in order of increasing utility, and respectively. 2.) Use the point drawing tool to draw two points to identify a consumer optimurn for each level of additional income. Label these new points...
The following graph shows three indifference curves and budget constraints for a consumer. The consumer is...
The following graph shows three indifference curves and budget constraints for a consumer. The consumer is initially consuming at point A, on the indifference curve Ui and is constrained by the budget constraint BC1 (indicated by the blue line) Bc3 10 Ul BC BC 10 Suppose the government provides this consumer a subsidy on good x, which effectively lowers the price of x. This is represented by a of BC1 out away from the origin. The result is this consumer...
Use the information in the figure to determine what happens to David's quantity demanded and consumer...
Use the information in the figure to determine what happens to David's quantity demanded and consumer surplus if price is equal to p = $3. Using the point drawing tool, indicate the market price and the quantity David demands at that price. Label this point 'e.' Carefully follow the instructions above, and only draw the required object. David's consumer surplus (CS) is equal to p, $ per magazine CS=$1 (Enter your response as a whole number.) Demand 5 2 3...
The diagram to the right is a basic supply and demand graph. Economists use it to...
The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market When price equals $6, a surplus occurs 1.) Using the line drawing tool, draw a horizontal line from the $6 value on the vertical axis to represent the surplus. Label this line Price 2) Using the point drawing tool, locate quantity demanded (label the point P) and quantity supplied (label the point P2) at this price...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose Py, and the consumer has $300 to spend. Draw the Price-Consumption Curve for this consumer for income values Px-1, Px 2, and Px- 5. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through...
The graph to the right depicts the average cost curves and the marginal cost curve for...
The graph to the right depicts the average cost curves and the marginal cost curve for a typical firm in a competitive industry. 1.) Using the line drawing fool, draw the firm's demand curve at a market price such that the firm is breaking even. Label your curved, 2.) Using the line drawing tool, draw the firm's demand curve at a market price such that the firm is at its shutdown price. Label your curved, Carefully follow the instructions above,...
The graph to the right illustrates Jessica's preferences for pizza and Coke using indifference curves (Upper I 1I1, Upper I 2I2, Upper I 3I3, and Upper I 4I4). Use the point drawing tool to...
The graph to the right illustrates Jessica's preferences for
pizza and Coke using indifference curves (Upper I 1I1, Upper I
2I2, Upper I 3I3, and Upper I 4I4). Use the point drawing tool
to indicate a bundle of pizza and Coke that Jessica would prefer to
bundle A (Bundle B), a bundle for which Jessica would be
indifferent with bundle A (Bundle C), and a bundle that would be
inferior to bundle A (Bundle D). Draw each bundle such that...
In a simple economy (assume there are no taxes, thus Y is disposable income) the consumption...
In a simple economy (assume there are no taxes, thus Y is disposable income) the consumption function is C = 400 +0.75Y 2800- In this economy, the level of income at which the consumer breaks even (consumption equals income) is 24004 20004 1.) Using the point drawing tool, identify the breakeven income/consumption point that you found above 2) Using the line drawing tool, carefully graph the consumption function Properly label your line. Carefully follow the instructions above, and only draw...
A monopoly faces the demand curve P = 12 - 1.0Q,
A monopoly faces the demand curve P = 12 - 1.0Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $4.00 per unit. Draw the average and marginal revenue curves and the average and marginal cost curves. 1.) Using the line drawing tool, draw the average revenue curve and label it 'AR'. 2.) Using the line drawing tool, draw the marginal revenue curve and label it 'MR'. 3.) Using the line drawing tool,...
X Concept: Indifference Curves 2 The graph to the right thustrates Jessio's preferences for pizza and Coke using indifference curves bb, and Use the point drawing tool to indicate a bundle of pur and Coke that Jessica would prefer to bundle A Bundle B), a bundle for which Jessica would be interent with bundle A (Bunda C), and a bundle that would be inferior to hundie A (Bundle Dj Draw each bunde such that corresponds to a level of utility...
In the diagram to the right both goods are normal goods. 1.) Use the 3-point curved line drawing tool to draw two additional indifference curves each tangent to a different budget constraint reflecting the effects of changing income on goods X and Y. Properly label these indifference curves in order of increasing utility, and respectively. 2.) Use the point drawing tool to draw two points to identify a consumer optimurn for each level of additional income. Label these new points...
The following graph shows three indifference curves and budget constraints for a consumer. The consumer is initially consuming at point A, on the indifference curve Ui and is constrained by the budget constraint BC1 (indicated by the blue line) Bc3 10 Ul BC BC 10 Suppose the government provides this consumer a subsidy on good x, which effectively lowers the price of x. This is represented by a of BC1 out away from the origin. The result is this consumer...
Use the information in the figure to determine what happens to David's quantity demanded and consumer surplus if price is equal to p = $3. Using the point drawing tool, indicate the market price and the quantity David demands at that price. Label this point 'e.' Carefully follow the instructions above, and only draw the required object. David's consumer surplus (CS) is equal to p, $ per magazine CS=$1 (Enter your response as a whole number.) Demand 5 2 3...
The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market When price equals $6, a surplus occurs 1.) Using the line drawing tool, draw a horizontal line from the $6 value on the vertical axis to represent the surplus. Label this line Price 2) Using the point drawing tool, locate quantity demanded (label the point P) and quantity supplied (label the point P2) at this price...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose Py, and the consumer has $300 to spend. Draw the Price-Consumption Curve for this consumer for income values Px-1, Px 2, and Px- 5. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through...
The graph to the right depicts the average cost curves and the marginal cost curve for a typical firm in a competitive industry. 1.) Using the line drawing fool, draw the firm's demand curve at a market price such that the firm is breaking even. Label your curved, 2.) Using the line drawing tool, draw the firm's demand curve at a market price such that the firm is at its shutdown price. Label your curved, Carefully follow the instructions above,...
The graph to the right illustrates Jessica's preferences for
pizza and Coke using indifference curves (Upper I 1I1, Upper I
2I2, Upper I 3I3, and Upper I 4I4). Use the point drawing tool
to indicate a bundle of pizza and Coke that Jessica would prefer to
bundle A (Bundle B), a bundle for which Jessica would be
indifferent with bundle A (Bundle C), and a bundle that would be
inferior to bundle A (Bundle D). Draw each bundle such that...
In a simple economy (assume there are no taxes, thus Y is disposable income) the consumption function is C = 400 +0.75Y 2800- In this economy, the level of income at which the consumer breaks even (consumption equals income) is 24004 20004 1.) Using the point drawing tool, identify the breakeven income/consumption point that you found above 2) Using the line drawing tool, carefully graph the consumption function Properly label your line. Carefully follow the instructions above, and only draw...
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