Question

Suppose the prices of goods X and Y both double, while the consumer's income is unchanged....

Suppose the prices of goods X and Y both double, while the consumer's income is unchanged. This will

cause the consumer's budget constraint to:

Select one:

a. shift inward in a parallel fashion

b. shift inward and become flatter

c. shift inward and become steeper

d. shift outward in a parallel fashion

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose X and Y are substitutes and are both normal goods. Assume X is on the...
Suppose X and Y are substitutes and are both normal goods. Assume X is on the horizontal axis and Y is on the vertical axis. If the price of X increase, which of the following will NOT happen? A) The slope of the income offer curve will become flatter B) The slope of the income offer curve will become steeper C) The Engel Curve for X will become steeper/ "shift" to the left D) The Engel Curve for Y will...
1- If a consumer's income decreases, what will happen to the budget line? Multiple Choice It...
1- If a consumer's income decreases, what will happen to the budget line? Multiple Choice It will shift outward. It will become steeper. It will become flatter. It will shift inward. 2- If an increase in income causes a decrease in the consumption of good Y, we know that good Y is: Multiple Choice a normal good. a substitute. a complement. an inferior good. 3- A > B means: Multiple Choice bundle A is not preferred to bundle B. bundle...
Suppose there are two goods, good X and good Y . Both goods are available in...
Suppose there are two goods, good X and good Y . Both goods are available in arbitrary non-negative quantities; that is, the consumption set is R2++. A typical consumption bundle is denoted (x,y), where x is the quantity of good X and y is the quantity of good Y . A consumer, Alia, faces two constraints. First, she has a limited amount of wealth, w > 0, to spend on the goods X and Y , and both of these...
) A consumer's utility function is given by: U(x,y) = 10xy Currently, the prices of goods...
) A consumer's utility function is given by: U(x,y) = 10xy Currently, the prices of goods x and y are $3 and $5, respectively, and the consumer's income is $150 . a. Find the MRS for this consumer for any given bundle (x,y) . b. Find the optimal consumption bundle for this consumer. c. Suppose the price of good x doubles. How much income is required so that the Econ 201 Beomsoo Kim Spring 2018 consumer is able to purchase...
Let U (x ,y) = x ,y represent the consumer's utility function. If the consumer's income...
Let U (x ,y) = x ,y represent the consumer's utility function. If the consumer's income (M) is $1,000, the price of Good X is $10, and the price of Good Y is $20, what is the slope of the budget line or market rate of substitution between Goods X and Y?
. Suppose your utility depends on two goods: x and y. The utility function is u(x,...
. Suppose your utility depends on two goods: x and y. The utility function is u(x, y) = ln(x) + ln(y) . Suppose you have an income of $800. Further, assume that the price of x is 8 and the price of y is 10. Write down the equation for the budget constraint. Compute the marginal rate of subsitution between x and y. • Compute the utility maximizing combination of x and y. • Suppose your income increases to $1000...
Suppose there are two goods, X and Y.  The price of good X is $2 per unit...
Suppose there are two goods, X and Y.  The price of good X is $2 per unit and the price of good Y is $3 per unit.  A given consumer with an income of $300 has the following utility function: U(X,Y) = X0.8Y0.2         which yields marginal utilities of: MUX= 0.8X-0.2Y0.2 MUY= 0.2X0.8Y-0.8         a.     What is the equation for this consumer’s budget constraint in terms of X and Y?         b.    What is the equation for this consumer’s marginal rate of substitution (MRSXY)?  Simplifyso you only have...
The vertical (Y-axis) intercept of a consumer's budget constraint reflects: I. the maximum amount of the...
The vertical (Y-axis) intercept of a consumer's budget constraint reflects: I. the maximum amount of the Y good the consumer is able to consume, given she spends all her income on good Y II. the ratio of the consumer's income to the price of the Y good III. the ratio of the price of the X good to the price of good Y IV. the ratio of the consumer's income to the price of the X good Select one: a....
Question 1 The line that connects the combinations of goods that leave you indifferent is called:...
Question 1 The line that connects the combinations of goods that leave you indifferent is called: Select one: a. the indifference curve. b. the budget constraint. c. the indifference constraint. d. the indifference line. Question 2 An increase in income will cause: Select one: a. the budget constraint to become flatter, so that it includes more combinations. b. the budget constraint to become steeper, so that it includes more combinations. c. a parallel shift inward of the budget constraint. d....
1. Emily has preferences for two goods x, y while her marginal rate of substitution (MRS)...
1. Emily has preferences for two goods x, y while her marginal rate of substitution (MRS) between x and y is given by 3y/x. Her budget constraint is m ≥ pxx + pyy, where m = income and px, py are prices of x, y respectively. (a) Emily's expenditure on y (i.e., pyy) is 1/3 of her expenditure on x (i.e., pxx). Is this true Are x and y normal goods? (b) Andrew has different preferences: his marginal rate of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT