Homework Answers
We will have three equations, using Px= 10 and Py =20:
10X + 20 Y = 400, 10X + 20 Y = 500 and 10X + 20 Y = 600
These are represented as LL' , MM' and NN'
Please see diagram
Each week, Mary selects the quantity of two goods, X and Y that she will consume...
Each week, Mary selects the quantity of two goods, X and Y that she will consume in order to maximize her utility. She spends her entire weekly income on these two goods. Suppose you are given the following information about the choices that Mary makes over a three-week period, where Px is the price of good X, Py is the price of good Y, and I is income: X Y PX PY Week 1 10 10 $1 $1 20 Week...
A consumer is choosing between magazines and books. His indifference curves are shown on the graph...
A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (Py) is constant and equal to $5.00 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books Px1 = $3.00, Pxa_ $5.00, P. $7.50, P. $15.00 Properly label the lines 2.) Use the line drawing tool to draw...
Concept: Derive Individual Demand Curve Barry consumes tacos and pepsi. The price of tacos is initially...
Concept: Derive Individual Demand Curve Barry consumes tacos and pepsi. The price of tacos is initially $2.00 per taco and the price of pepsi is $2.00 per can and Barry has $16.00 to spend. The marginal utility that each good yields is illustrated in the table below, along with the marginal utility per dollar spent on each good at these prices 10 MU Tacos MUT PT Pepsi MUp PP 1 10 5 1 10 5 MU What is Barry's demand...
Show the substitution effect, income effect, and total effect from a price increase using the equivalent...
Show the substitution effect, income effect, and total effect from a price increase using the equivalent variation approach In the figure, the individual is initially maximizing utility at bundle eq on budget line L' on indifference curve l. Then the price of good X increases, pivoting the budget line to L. The consumer maximizes utility at the new prices at bundle e2 on indifference curve l 2 1.) Using the line drawing tool, draw a new budget line representing the...
1.) Use the line drawing tool to draw the equation Y = 1 +X. Label your...
1.) Use the line drawing tool to draw the equation Y = 1 +X. Label your line 'A'. 2.) Use the line drawing tool to draw the equation Y = 18-1.50X. Label your line 'B'. 3.) Use the point drawing tool to indicate the point where both equations are equal. Label this point 'Equilibrium'. Carefully follow the instructions above, and only draw the required objects. Price P = f(Q) 2 6 10 12 Quantity (Q) 14 16 18 20
Using the triangle drawing tool twice, draw the consumer and producer surplus after the reduction in...
Using the triangle drawing tool twice, draw the consumer and
producer surplus after the reduction in supply then label each
triangle.
On April 20, 2010, an oil-drilling platform owned by British Petroleum exploded in the Gulf of Mexico, causing oil to leak into the gulf at estimates closed over 25 percent of federal waters, whichestated the commercial fishing industry in the area of 1.5 to 2.5 million gallons per day for well over 2 months. Due to the oil spill,...
The figure to the right shows Jill's budget constraint and her utility maximizing bundle (point R)....
The figure to the right shows Jill's budget constraint and her utility maximizing bundle (point R). What happens to her optimum if her income increases by 25%? 1.) Use the line drawing tool to show the new budget line. Label this line 'L 2.. 2.) Use the point drawing tool to locate a new consumer optimum if good Y is an inferior good. Label this point 'T'. 25- 24- 23- 22- 21- 20- 19- 18- 17- 16- 15- 14- 13-...
Price Graph The graph shows the market for good A. The equilibrium price and quantity is...
Price Graph The graph shows the market for good A. The equilibrium price and quantity is PM and Q, respectively. Suppose the government imposes a price control that reduces producer surplus. Determine the type of price control and show it on the graph. The price control set by the government in this situation is a Using the line drawing tool, draw a price control line and label it "Price Control Carefully follow the instructions above, and only draw the required...
The following table shows Ellie's utility from consuming slices of cake and cans of Pepsi. Suppose...
The following table shows Ellie's utility from consuming slices
of cake and cans of Pepsi.
Suppose Ellie has $12 per week to spend on cake and Pepsi and that
the price of a slice of cake is $2.00.
1.) Use the point drawing tool to plot Ellie's demand for Pepsi
at a price of $2.00. Label this point 'A'.
2.) Use the point drawing tool to plot Ellie's demand for Pepsi
at a price of $4.00. Label this point 'B'....
2. Deriving own-price demand from an indifference map Aa Aa E Laura lives in San Diego...
2. Deriving own-price demand from an indifference map Aa Aa E Laura lives in San Diego and enjoys drinking coffee and listening to records on her vintage record player. The price of a cup of coffee is held constant at $1 throughout this problem. On the following diagram, the red curves (IC1 and IC2) are two of Laura's indifference curves. The lines BC1 and BC2 show two budget constraints. Points X and Y show Laura's best bundles subject to these...
Each week, Mary selects the quantity of two goods, X and Y that she will consume in order to maximize her utility. She spends her entire weekly income on these two goods. Suppose you are given the following information about the choices that Mary makes over a three-week period, where Px is the price of good X, Py is the price of good Y, and I is income: X Y PX PY Week 1 10 10 $1 $1 20 Week...
A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (Py) is constant and equal to $5.00 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books Px1 = $3.00, Pxa_ $5.00, P. $7.50, P. $15.00 Properly label the lines 2.) Use the line drawing tool to draw...
Concept: Derive Individual Demand Curve Barry consumes tacos and pepsi. The price of tacos is initially $2.00 per taco and the price of pepsi is $2.00 per can and Barry has $16.00 to spend. The marginal utility that each good yields is illustrated in the table below, along with the marginal utility per dollar spent on each good at these prices 10 MU Tacos MUT PT Pepsi MUp PP 1 10 5 1 10 5 MU What is Barry's demand...
Show the substitution effect, income effect, and total effect from a price increase using the equivalent variation approach In the figure, the individual is initially maximizing utility at bundle eq on budget line L' on indifference curve l. Then the price of good X increases, pivoting the budget line to L. The consumer maximizes utility at the new prices at bundle e2 on indifference curve l 2 1.) Using the line drawing tool, draw a new budget line representing the...
1.) Use the line drawing tool to draw the equation Y = 1 +X. Label your line 'A'. 2.) Use the line drawing tool to draw the equation Y = 18-1.50X. Label your line 'B'. 3.) Use the point drawing tool to indicate the point where both equations are equal. Label this point 'Equilibrium'. Carefully follow the instructions above, and only draw the required objects. Price P = f(Q) 2 6 10 12 Quantity (Q) 14 16 18 20
Using the triangle drawing tool twice, draw the consumer and
producer surplus after the reduction in supply then label each
triangle.
On April 20, 2010, an oil-drilling platform owned by British Petroleum exploded in the Gulf of Mexico, causing oil to leak into the gulf at estimates closed over 25 percent of federal waters, whichestated the commercial fishing industry in the area of 1.5 to 2.5 million gallons per day for well over 2 months. Due to the oil spill,...
The figure to the right shows Jill's budget constraint and her utility maximizing bundle (point R). What happens to her optimum if her income increases by 25%? 1.) Use the line drawing tool to show the new budget line. Label this line 'L 2.. 2.) Use the point drawing tool to locate a new consumer optimum if good Y is an inferior good. Label this point 'T'. 25- 24- 23- 22- 21- 20- 19- 18- 17- 16- 15- 14- 13-...
Price Graph The graph shows the market for good A. The equilibrium price and quantity is PM and Q, respectively. Suppose the government imposes a price control that reduces producer surplus. Determine the type of price control and show it on the graph. The price control set by the government in this situation is a Using the line drawing tool, draw a price control line and label it "Price Control Carefully follow the instructions above, and only draw the required...
The following table shows Ellie's utility from consuming slices
of cake and cans of Pepsi.
Suppose Ellie has $12 per week to spend on cake and Pepsi and that
the price of a slice of cake is $2.00.
1.) Use the point drawing tool to plot Ellie's demand for Pepsi
at a price of $2.00. Label this point 'A'.
2.) Use the point drawing tool to plot Ellie's demand for Pepsi
at a price of $4.00. Label this point 'B'....
2. Deriving own-price demand from an indifference map Aa Aa E Laura lives in San Diego and enjoys drinking coffee and listening to records on her vintage record player. The price of a cup of coffee is held constant at $1 throughout this problem. On the following diagram, the red curves (IC1 and IC2) are two of Laura's indifference curves. The lines BC1 and BC2 show two budget constraints. Points X and Y show Laura's best bundles subject to these...
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