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- 5. Suppose that the representative consumer's pref- erences change, in that his or her marginal rate of substitution of leisure for consumption in- creases for any quantities of consumption and leisure. (a) Explain what this change in preferences means in more intuitive language. (b) What effects does this have on the equilib- rium real wage, hours worked, output, and consumption? (c) Do you think that preference shifts like this might explain why economies experience recessions (periods when output is low)? Explain why or why not, with reference to the key business cycle facts in Chapter 3.Price of a flash drive is 2 USD and the quantity bought of flash drive is 500. What would be the total expenditure on flash drive? a. 250 O b. 1000 O c. 498 O d. None of theseTitle Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she mus Description Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she must have exactly two spoonfuls of coconut oil for each cup of coffee. Let C be the number of cups of coffee, and O be the number of spoonfuls of coconut oil. Also, let PC be the price of a cup of coffee. Suppose Lynn has $12 to spend on coffee and coconut oil. Also, the price of coconut oil is $.50 per spoonful.a) Graph Lynnâs Price Consumption Curve for prices, PC = $1, PC = $2, and PC = $3. Please put the number of cups of coffee on the horizontal axis, and the number of spoonfuls of coconut oil on the vertical axis. Be sure to label your graph carefully and accurately.b) Graph Lynnâs demand curve for coffee. You may assume that both coconut oil and coffee are continuous variables so she can consume any amount of coffee and coconut oil that she could afford.…
- 8. Suppose both the consumption good and leisure are normal goods any graphs what will happen to the household's choice if there is (a) an increase in dividend income ; (b) an increase in wage w. without bois 1-on0 9TI laicuro in inferior RengatQUESTION 44 What is being described here? "The excess of utility from the consumption of one more unit of a good, over the price paid". O a. Marginal consumer surplus O b. The slope of the indifference curve O c. Marginal utility O d. Total utility3) Joshua is a utility maximizer and likes ice cream. He likes vanilla ice cream, but wouldhappily switch to chocolate ice cream if offered 1 scoop of chocolate ice cream for everyscoop of vanilla ice cream he has to give up. He has $5 of income to spend on ice cream.If vanilla ice cream costs $1 per scoop and chocolate ice cream costs $2.5 per scoop,Joshua will consume ______ scoops of chocolate and ______ scoops of vanilla ice creamper day.A) 0; 5B) 5; 0C) 2; 0D) 0; 2E) None of the above.
- Question 9 If we observe that a consumerâ s budget constraint has shifted inward, we can assume that the consumer will buy O more normal goods and fewer inferior goods O more normal goods and more inferior goods O fewer normal goods and more inferior goods fewer normal goods and fewer inferior goods O O9: Is il fossible for marginal utility To be negetive and yet Tolal Utilily To positive ? INhy be why not ? or0- Principles of Economics 1| S1 21/22 Time l A tax placed on buyers of airline tickets will quantity of airline tickets to the price received by sellers of airline tickets and causes the Select one: O a. reduce; increase O b. not change; decrease O c. reduce; decrease O d. raise; decrease O e. raise; increase Ne:
- 2. James is an undergraduate student who has £800 of income to spend each semester on pizza and books. The price of a pizza is £8 and the price of a book is £40. (a)ln a diagram with pizza on the vertical axis and books on the horizontal axis, draw James's budget constraint. (b)Now suppose James's parents buy him a £400 gift voucher each semester that can only be used to buy books. In the same diagram for part (a), draw James's budget constraint when he has the gift voucher in addition to his £800 income. (c)ls James better-off with the gift voucher? Explain your answer.Quantity of Milk per Week 1 By B₂ Quantity of Bread per Week (i) FIGURE 6-9 Quantity of Milk per Week Select one: O A. an increase in money income. OB. an increase in the price of bread. Z B₁ B₂ B3 Quantity of Bread per Week (ii) Refer to Figure 6-9. In part (ii), the consumer's move from point X to point Z is caused by OC a change in the consumer's preferences towards bread. OD. a decrease in the price of milk. O E. a decrease in the price of bread.Consider the following graph, which shows the relationship between an individual's income and the number of times he or she eats out each month. QUANTITY (Dinners out per month) 20 18 16 14 12 10 8 0 0 1 2 6 8 4 5 7 INCOME (Thousands of dollars per month) 3 O 9 10 0 Nick Hint: When answering the following, be sure to specify the appropriate units. The blue point already shown on the graph shows the data for Rosa. According to the graph, Rosa's income is , and she has
