Question

1.) We can derive a price consumption curve by repeatedly changing the price of x, _____________??...

1.) We can derive a price consumption curve by repeatedly changing the price of x, _____________??

           

  

a.) rotating the budget constraint then determining the new optimal quantities of x consumed, holding the amount of y consumed constant.?

           

           

b.) shifting the budget constraint then determining the new optimal quantities of x consumed, holding the amount of y.?

           

           

c.) rotating the budget constraint then mapping out the new optimal quantities of x and y consumed.?

           

           

d.) shifting the budget constraint then determining the new optimal quantities of x and y consumed.?

2.) We can derive a demand curve by repeatedly changing the price of x, _____________??

rotating the budget constraint then mapping out the new optimal quantities of x and y consumed. Finally, on a separate graph, map out the optimal quantity of x and optimal quantity of y consumed.?

shifting the budget constraint then mapping out the new optimal quantities of x and y consumed. Finally, on a separate graph, map out the optimal quantity of x and optimal quantity of y consumed.?

rotating the budget constraint then mapping out the new optimal quantities of x and y consumed. Finally, on a separate graph, map out the price of x and optimal quantity of x consumed.?

shifting the budget constraint then mapping out the new optimal quantities of x and y consumed. Finally, on a separate graph, map out the price of x and optimal quantity of x consumed.?

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Homework Answers

Answer #1

1. c.) rotating the budget constraint then mapping out the new optimal quantities of x and y consumed.?
Explanation: To find PCC, we change the price of one good and see how the optimal quantitues change.

2. rotating the budget constraint then mapping out the new optimal quantities of x and y consumed. Finally, on a separate graph, map out the price of x and optimal quantity of x consumed.?
Explanation: Demand curve shows the relation between price and quantity demand of that good.

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