Consider the household production model. An individual produces some of their meals using precooked food (that requires no preparation time) and some of their meals using raw food. For each of the following changes, briefly explain whether you expect the change to i) increase, ii) decrease, or iii) have an uncertain effect on a household's purchases of precooked food. a) Assume that the individual experiences a wage increase. b) Assume that the price of raw food has increased. c) Assume that the price of precooked food has increased

Consider the household production model. An individual produces some of their meals using precooked food (that requires no preparation time) and some of their meals using raw food. For each of the following changes, briefly explain whether you expect the change to i) increase, ii) decrease, or iii) have an uncertain effect on a household's purchases of precooked food. a) Assume that the individual experiences a wage increase. b) Assume that the price of raw food has increased. c) Assume that the price of precooked food has increased

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter21A: Appendix: Indifference Analysis

Section: Chapter Questions

Problem 3E

See similar textbooks

Similar questions

Graphically illustrate how each of the following events, ceteris paribus, will affect the market for coffee. (Start new graph for each question.) Your diagrams must include initial and subsequent, prices, quantities, curves, equilibriums and related movements along a curve. The price of tea increases. Coffee workers organize themselves into a union and gain higher wages. Coffee is shown to cause cancer in laboratory rats. Coffee prices are expected to rise rapidly in the near future. Interest rates decrease.
1. How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double? (Hint: focus on the budget constraint) 2. Output is produced according to a production process given by: Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L is $5, then what is the cost-minimizing combination of K and L capable of producing 32 units of output?
Graphically illustrate how each of the following events, ceteris paribus, will affect the market for coffee. (Start new graph for each question.) Your diagrams must include initial and subsequent, prices, quantities, curves, equilibriums and related movements along a curve. The price of tea increases. Coffee workers organize themselves into a union and gain higher wages. Coffee is shown to cause cancer in laboratory rats. Coffee prices are expected to rise rapidly in the near future.
study shows that eating a clove of garlic a day can help prevent heart disease, causing many consumers to demand more garlic. This increase in demand results in a rise in the price of garlic. Consumers, seeing that the price of garlic has gone up, reduce their demand for garlic. This causes the demand for garlic to decrease and the price of garlic to fall. Therefore, the ultimate effect of the study on the price of garlic is uncertain.”
The market price of hamburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several burger joints in the area have recently gone out of business. Other students attribute the increase in the price of hamburgers to a recent decrease in the price of french fries. Everyone agrees that the decrease in the price of french fries was caused by a recent decrease in the price of potatoes, which are not generally used in making hamburgers. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. The first group of students thinks the increase in the price of hamburgers is due to the fact that several burger joints in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the…
According to economists, the satisfaction people get from their consumption activities is called:
Karina is able to select her weekly work hours. When a new busway route opens up and starts to operate immediately, it cuts one hour off Karina’s total daily commute to work. If both leisure and income are normal goods, what is the effect of the shorter commute on Karina’s work time? Hint: Draw the budget constraint before and after new busway route opens up and explain what happen. You may set up Karina’s initial condition hypothetically. Following, describe about substitution and income effect.
can you answer these questions too: Suppose that more consumers prefer the disposable cell phone over the smart phone because the disposable cell phone is more durable than the smart phone. This latest news comes after the fact that firms that manufacture disposable cell phones have the latest technology integrated into their production facilities. What will be the market effect? Going back to question (d), suppose that the price of a disposable cell phone is now set at $11.75. How many disposable cell phones will be demanded by consumers? Whichever curve you’ve determined should be shifted, derive the new function.
The market price of pizzas in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizza parlors in the area have recently gone out of business. Other students attribute the increase in the price of pizzas to a recent decrease in the price of beer. Everyone agrees that the decrease in the price of beer was caused by a recent decrease in the price of grain, which is not generally used in making pizzas. The first group of students thinks the increase in the price of pizzas is due to the fact that several pizza parlors in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of pizzas. (graph in photo) The second group of students attributes the increase in the price of pizzas to the decrease in the price of beer.…
The market price of pizzas in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because several new pizza parlors have recently opened in the area. Other students attribute the decrease in the price of pizzas to a recent decrease in the price of hamburgers at local burger joints. Everyone agrees that the decrease in the price of hamburgers was caused by a recent decrease in the price of ground beef, which is not generally used in making pizzas. Assume that pizza parlors and burger joints are entirely separate entities-that is, there aren't places that serve both pizzas and hamburgers. The first group of students thinks the decrease in the price of pizzas is due to the fact that several new pizza parlors have recently opened in the area. On the following graph, adjust the supply and demand curves to illustrate the first group's explanation for the decrease in the price of…
6. An econometrician uses a model to estimate demand for wood-burning stoves (heaters) in Sweden. The following highlights the model: / Qws=f(Pws, Pw,Peh, Y) Where Qws is the quantity demanded of woodstoves, Pws is the price of wood stoves, Pw is the price of wood per bundle, Peh is the price of an electric heater and Y is the income of consumers. (a) Consider that the market for wood stoves in Sweden is currently at equilibrium. Draw neat diagrams for each case clearly explaining what would happen to the equilibrium price and quantity of woodstoves if: (i) (ii) (ii) Peh rises Pws falls Pw rises
What are the determinants for an individual demand? Receive with the help of indifference curves and the budget outline the optimal consumption plan. How do you transfer the optimal consumption plan into an individual demand function?