A commuter\'s utility function for gas (x-axis) and doughnuts (y-axis) is u(g,d)

Question

A commuter's utility function for gas (x-axis) and doughnuts (y-axis) is u(g,d)gd with MRS. His demand ida for gas is g27 Prices and income are currenty Ps 2, P2, and I 12, so at the moment he's consuming gold 3 gallons of gas and dol3. Next suppose (due to new oil discoveries), the price of gas falls to pe1. Use an indifference curve/budget diagram like those from class and the textbook to show the income and substitution effects of this price change on doughnut consumption. Compute the size of these two effects, discuss why they are positive or negative, and discuss how they relate to the total change in doughnut consumption, dnew- dold 2pg

Explanation / Answer

Polynomial Equations in Factored Form 353 9.5 Factoring Quadratic Expressions 358 9.6 Factoring Special Products 362 9.7 Factoring Polynomials Completely 365 9.8 Probability of Compound Events 370 9.9 Chapter 9 Review 373 9.10 Chapter 9 Test 375 10 Quadratic Equations and Functions 377 10.1 Graphs of Quadratic Functions 377 10.2 Solving Quadratic Equations by Graphing 385 10.3 Solving Quadratic Equations Using Square Roots 391 10.4 Solving Quadratic Equations by Completing the Square 394 10.5 Solving Quadratic Equations Using the Quadratic Formula 399 10.6 The Discriminant 403 10.7 Linear, Exponential, and Quadratic Models 407 10.8 Problem-Solving Strategies: Choose a Function Model 413 10.9 Chapter 10 Review 417 lO.lOChapter 10 Test 420 11 Radicals and Geometry Connections; Data Analysis 422 11.1 Graphs of Square Root Functions 422 11.2 Radical Expressions 426 11.3 Radical Equations 432 11.4 The Pythagorean Theorem and its Converse 436 11.5 The Distance and Midpoint Formulas 441 11.6 Measures of Central Tendency and Dispersion 447 11.7 Stem- and-Leaf Plots and Histograms 454 11.8 Box-and- Whisker Plots 461 11.9 Chapter 11 Review 467 ll.lOChapter 11 Test 469 12 Rational Equations and Functions; Statistics 471 12.1 Inverse Variation Models 471 12.2 Graphs of Rational

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