Homework Help Question & Answers

Your budget line for goods A and B is represented below. Which of the following statements...

2 0 1 23 4 5 6 7 8 9 10 Good AYour budget line for goods A and B is represented below. Which of the following statements is or could be TRUE?
(a) If income is $45, the price of Good A must always be $5.
(b) The price of Good A increases after the consumer buys 2 units.
(c) When you have 5 units of Good A, you are able to buy an additional unit of Good A if you give up 1/3 units of Good B.
(d) When you have 5 units of good B, the marginal rate of transformation of A for B is 1/3 (???ab = 1/3)
(e) All of the above statements are false.

2 0 1 23 4 5 6 7 8 9 10 Good A
0 0
Next > < Previous
ReportAnswer #1

Ans. a) If income is $45, the price of goods A must always be $5

when income is $45, the consumer can consume a maximum of 9 units of goods A

then, Qd = M/P, when income is $45= $45/9 = $5

Know the answer?
Add Answer of:
Your budget line for goods A and B is represented below. Which of the following statements...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 7. An individual's preferences are represented by the utility function Ua, y) 4xy x. Which of...

    7. An individual's preferences are represented by the utility function Ua, y) 4xy x. Which of the following statements is false? a. The marginal utility of x increases as x increases, holding y constant. b. Preferences are monotonic in both goods. c. The indifference curves slope downward at a decreasing rate. d. The marginal rate of substitution ofx for y increases as y increases, holding x constarnt e. The consumer is willing to give up decreasing amounts of good y...

  • Indicate whether the following statements are True or False e)If Tom's total utility from watching one...

    Indicate whether the following statements are True or False e)If Tom's total utility from watching one more minute of television increases but the increase for each additional minute is smaller tha the previous minute,he has diminishing marginal utility f)As a person consumes more and more slices of pizza, the marginal utility of each extra slice diminishes g)A consumer will maximize utility when all income is spent and the marginal utility is equal for all goods h)When Kathryn spends her entire...

  • Please assist with the following questions, 1. Which of the following statements best describes consumer surplus...

    Please assist with the following questions, 1. Which of the following statements best describes consumer surplus in the supply and demand model? Use letters in alphabetical order to select options A Consumer surplus is the area in the supply and demand model that is below the market price and above the demand curve. B Consumer surplus is the area in the supply and demand model that is above the market price and above the demand curve. C Consumer surplus is...

  • 4. Assume your budget is $30 and the price of goods A and B are $5/unit...

    4. Assume your budget is $30 and the price of goods A and B are $5/unit for A and $3/ unit for B. a On the following graph, graph your budget constraint and mark the optimal consumption point. Mark this original budget constraint. Assume your budget increases to $45, correctly mark and draw your new budget constraint. c. Assume your budgct decreases to $15, correctly mark and draw your new budget d. Correctly draw in your income expansion path e....

  • 3. Find the optimal bundle for a consumer with $500 budget whose preference is represented by...

    3. Find the optimal bundle for a consumer with $500 budget whose preference is represented by U(m, n) = 2m + 2n when a) Pm = 10, Pn = 20 (5 points) b) Pm = 20, Pn = 10 (5 points) 4. Show income and substitution effect on graph when price of a normal good decreases. (10 points)

  • Draw the budget constraint for the following situation. The consumer has income $60. The price of...

    Draw the budget constraint for the following situation. The consumer has income $60. The price of good 2 is constant and is equal to 5. The price of good 1 is also constant and is equal to 6, but for every 4 units of good 1 that you buy, you get a gift certificate for $10 that can only be used to purchase good 2. Label all important points.

  • Fint Questions https://litemprod person 43. The rate at which a consumer must give up y to get one more x is equal t...

    Fint Questions https://litemprod person 43. The rate at which a consumer must give up y to get one more x is equal to O A MU/MU OB. -MU,/MUY OC.-P.PY OD. - PP 44. Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then O A an extra unit of x costs 4/3 units of y. O B. an extra unit of y costs 4/3 units of O C....

  • Which of the following statements is true? If the price of a good is lowered and...

    Which of the following statements is true? If the price of a good is lowered and total revenue decreases, demand is elastic. If the price of a good is raised and total revenue does not change, demand is perfectly elastic. If the price of a good is lowered and total revenue increases, demand is inelastic. If the price of a good is raised and total revenue increases, demand is inelastic. and relatively inelastic demand is represented by a demand curve...

  • 3. Originally, the price of X is $150 and the price of Y is S50. If the price of X increases by $20 and the price o...

    3. Originally, the price of X is $150 and the price of Y is S50. If the price of X increases by $20 and the price of Y increases by S10, the new budget line will a. move outward and be parallel to the old budget line b. move outward and become steeper c. move inward and become steeper d. move outward and become flatter e. move inward and become flatter x"2 + 1n0) 4. An individual's preferences are represented...

  • Refer to the figure below. If the price of Good A is $2 and the price...

    Refer to the figure below. If the price of Good A is $2 and the price of Good B is $6, then the rational spending rule is satisfies when the consumer purchases ______ units of Good A and ______ units of Good B. Select one: a. 1; 1 b. 2; 1 c. 4; 3 d. 3; 2 Units Marginal Utility Marginal Utility of Good A 30 27 15 8 of Good B 40 24 14

Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.