c. 4, 1 d. 4,2 1. Emilio buys pizza for $10 and soda for $2. He has income of $1
ID: 1126654 • Letter: C
Question
c. 4, 1 d. 4,2 1. Emilio buys pizza for $10 and soda for $2. He has income of $100. His budget constraint will experience a parallel outward shift if which of the following events occur? a. The price of pizza falls to $5, the price of soda falls Charlie buys only milk and cereal. Milk is a normal good, while cereal is an inferior good. When the price of milk rises, Charlie buys a. less of both goods. b. more milk and less cereal. c. less milk and more cereal. d. less milk, but the impact on cereal is ambiguous. 4. to $1, and his income falls to $50 b. The price of pizza rises to $20, the price of soda rises to $4, and his income remains the same. The price of pizza falls to $8, the price of soda falls to $1, and his income rises to $120. c. 5. If the price of pasta increases and a consumer buys d. The price of pizza rises to $20, the price of soda more pasta, we can infer that a. pasta is a normal good, and the income effect is rises to $4, and his income rises to $400. At any point on an indifference curve, the slope of the curve measures the consumer's a. income. 2. greater than the substitution effect. b. pasta is a normal good, and the substitution effect b. willingness to trade one good for the other c. perception of the two goods as substitutes or is greater than the income effect. c. pasta is an inferior good, and the income effect is greater than the substitution effect d. pasta is an inferior good, and the substitution effect complements. d. elasticity of demand Matthew and Susan are both optimizing consumers in is greater than the income effect. 3, 6·The labor-supply curve slopes upward if the markets for shirts and hats, where they pay $100 for a shirt and $50 for hat. Matthew buys 4 shirts and 16 hats, while Susan buys 6 shirts and 12 hats. From a. leisure is a normal good b. consumption is a normal good. c. the income effect on leisure is greater than the this information, we can infer that Matthew's marginal rate of substitution ishats per shirt, while Susan's is substitution effect d. the substitution effect on leisure is greater than the income effect.Explanation / Answer
2. At any point on an indifference curve , the slope of the curve measures the consumer's willingness to trade one good for the other. Option(b) is correct.
3. Mathew and susan are both optimising consumers in the markets for shirts and hats, where they pay $100 for a shirt and $50 for hat. Mathew buys 4 shirts and 16 hats, while Susan buys 6 shirts and 12 hats. From this information, we can infer that Mathew's marginal rate of substitution is Price of shirts / price of hats = 100/50 = 2 and Susan's marginal rate of substitution is the same = price of shirts/ price of hats =100/50 = 2.
Therefore, option (b) is correct i.e (2,2).
4. Charlie buys only milk and cereal . Milk is a normal good , while cereal is an inferior good . When the price of cereal rises , Charlie buys less milk and more cereal. Option(c) is correct.
5. If the price of pasta increases and a consumer buys more pasta , we can infer that pasta is an inferior good, and income effect is greater than the substitution effect. Option(c) is correct.
6. The labour-supply curve slopes upward if the substitution effect on leisure is greater than the income effect. Option (d) is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.