A-B=b. Does the budget set change if the prices of both goods double and the consumer's income also doubles?Yes, it shifts out from the origin.O No, it does not change.Yes, it rotates clockwise.Yes, it shifts in toward the origin.c. Given the equation for the budget set, what are the prices of the two goods?Good X: $Good Y: $What is the consumer's income?$ReferenceseBook & ResourcesGraphingLearning Objective: 04-02 Illustrate howchanges in prices and income impact anindividuals opportunities80F3DOD000F4MacBook Air7 Connect Website-2018U MBA815 VA Managerial Economics:A consumer's budget set for two goods (X and Y) is 900 ≥ 6X+3Y.a. The budget set is illustrated below. What are the values of A and B?A-Good YGood XBeztoB-b. Does the budget set change if the prices of both goods double and the consumer's income also doubles?Yes, it shifts out from the origin.No, it does not change.Yes, it rotates clockwise.Yes, it shifts in toward the ongin.MacBook Air

A budget constraint represents the limitations that an individual faces in terms of the quantity of…

A- B- b. Does the budget set change if the prices of both goods double and the consumer's income also doubles? 0000 Yes, it shifts out from the origin. No, it does not change. Yes, it rotates clockwise. Yes, it shifts in toward the origin. c. Given the equation for the budget set, what are the prices of the two goods? Good X: $ Good Y: $ What is the consumer's income?

A- B- b. Does the budget set change if the prices of both goods double and the consumer's income also doubles? 0000 Yes, it shifts out from the origin. No, it does not change. Yes, it rotates clockwise. Yes, it shifts in toward the origin. c. Given the equation for the budget set, what are the prices of the two goods? Good X: $ Good Y: $ What is the consumer's income?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 2QFR

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Andre has a salary of 1000. He spends his entire salary on shoes and beer. The cost far a pair of shoes is $15 and the cost for a can beer is $25. What is Andre's budget constraint?
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a. Andre has a salary of $1000. He spends his entire budget on shoes and beers. The cost for a pair of shoes is $15 and the cost for can of beer is $25. i. Construct Andre's budget constraint (place) beers on the y-axis. ii. Suppose Andre's salary rises by 25%. Also suppose that the price of shoes and beers each rise by 40%. Construct Andre's new budget constraint. What is the difference between the new and old budget constraints? Suppose that the price of beers fell from $25 per beer to $15. Construct Andre's new budget constraint. What is the difference between the new and old budget constraints. iii. b. Explain the relationship between the budget constraint and indifference curve at consumer optimum.
MICROECONOMICS The utility function of a consumer regarding two goods x and y is given by U(x,y) = x^(1,2)y^(6). We know that good x costs 20, and good y costs 90 units of money. The consumer's entire budget is 7440 units of money. How much is her optimal consumption of the good x?
[Related to Solved Problem 10.4 on page 330] In an article in the Quarterly Journal of Economics, Ted O’Donoghue and Matthew Rabin make the following observation: “People have self-control problems caused by a tendency to pursue immediate gratification in a way that their ‘longrun selves’ do not appreciate.” What do they mean by a person’s “long-run self ”? Give two examples of people pursuing immediate gratification that their long-run selves would not appreciate. Based on Ted O’Donoghue and Matthew Rabin, “Choice and Procrastination,” Quarterly Journal of Economics, February 2001, pp. 125–126.
a. Andre has a salary of $1000. He spends his entire budget on shoes and beers.The cost for a pair of shoes is $15 and the cost for can of beer is $25.i. Construct Andre’s budget constraint (place) beers on the y-axis. ii. Suppose Andre’s salary rises by 25%. Also suppose that the price ofshoes and beers each rise by 40%. Construct Andre’s new budget constraint. What is the difference between the new and old budgetconstraints? iii. Suppose that the price of beers fell from $25 per beer to $15. ConstructAndre’s new budget constraint. What is the difference between the newand old budget constraints.