Question

Suppose the price of candy is initially $3 per candy in City A but that it may change by the next period.

Draw the Marshallian demand curve for the demand for candy, and the associated Hicksian demand, as a function of the price of candy. Carefully label the axes, show how the two curves compare to each other, and label the point at which the curves cross.

Suppose now that the price of candy increases to $5. Show on the graph the new quantity that would be purchased by the consumer and carefully label to change in quantity demanded due to the income and substitution effects.

Answer #1

Draw the Marshallian demand curve for the demand for candy, and the associated Hicksian demand, as a function of the price of candy. Carefully label the axes, show how the two curves compare to each other, and label the point at which the curves cross.

Suppose now that the price of candy increases to $5. Show on the graph the new quantity that would be purchased by the consumer and carefully label to change in quantity demanded due to the income and substitution effects.

Suppose in Diamond Land people mine diamonds, and you have a
demand and supply curve for diamonds, where P is the price of
diamonds and Q is the quantity demanded for diamonds (in
pounds):
P=300-0.5Q
P=100+0.5Q
Please find the equilibrium price and quantity for diamonds.
Please graph supply and demand curves and show the equilibrium
price and quantity demanded on the graph. Please also label the
axes, intercepts, and curves.
Suppose the government of Diamond Land wants to implement price...

5. If the price of a candy bar is $1 and the price of a fast
food meal is $5, then the A) relative price of a candy bar is 5
fast food meals per candy bar. B) money price of a candy bar is 1/5
of a fast food meal per candy bar. C) relative price of a fast food
meal is 5 candy bars per fast food meal. D) money price of a fast
food meal is 1/5...

Table 3-3
Price per Bushel
Quantity Demanded
(bushels)
Quantity Supplied (bushels)
$2
40,000
0
4
36,000
4,000
6
30,000
8,000
8
24,000
16,000
10
20,000
20,000
12
18,000
28,000
14
12,000
36,000
16
6,000
40,000
Refer to Table 3-3. The
table contains information about the sorghum market. Use the table
to graph the supply and demand curves on the same diagram. Please
label the horizontal and vertical axes properly, and clearly label
the supply and demand curves.
To upload your...

The demand schedule below shows how many candy bars
Patrick will buy at different prices.
Price of candy bars
Quantity Demanded
$1.00
2
$0.80
3
$0.70
4
$0.60
5
$0.50
6
The Supply schedule below shows how many candy bars The
Sweet Shop supply at different prices.
Price of Candy Bars
Quantity Supplied
$1.00
4
$0.80
3
$0.70
2
$0.60
1
$0.50
0
Combine Patrick’s demand schedule with The Sweet Shop’s
supply schedule to create one schedule. Then create a...

) Draw a supply and demand graph that gives you the result
stated in 5a and 5b. Based on the information in each statement,
you should shift either the demand or the supply curve, and show
that shift on the graph. Then, you must write a statement about the
elasticity of the other curve (the curve that does not shift),
which gives you the indicated result. Label the graph carefully,
including the axes. Label the initial supply curve S1 and...

Problems 2–3 are based on the model of demand and supply for
coffee as shown in Figure 3.10 "Changes in Demand and Supply". You
can graph the initial demand and supply curves by using the
following values, with all quantities in millions of pounds of
coffee per month: (1 Point each)
Price Quantity demanded Quantity
supplied
$3
40
10
4
35
15
5
30
20
6
25
25
7
20
30
8
15
35
9
10
40
Suppose the quantity...

Suppose a consumer only consumes two goods. There is a price
drop of good 1 and the quantity demanded of good 1 increased from 5
unit to 20 unit, the substitution effect is 10 unit. Use a graph to
show the income effect and substitution effect for these two goods.
Label the direction of substitution effect and income effect and
calculate income effect.

Suppose there are three buyers of candy in a market: Tex, Dex,
and Rex. The market demand and the individual demands of Tex, Dex,
and Rex for candy are given in the table below.
a. Fill in the table for the missing values.
Price
per Candy
Tex
Qd
Dex
Qd
Rex
Qd
Total Quantity Demanded
$10
2
3
2
9
4
4
14
8
5
10
21
7
8
14
28
6
10
7
18
b. (i) Which buyer demands...

3. Nora enjoys fish (F) and chips(C). Her utility function is
U(C, F) = 2CF. Her income is B per month. The price of fish is
PF and the price of chips is PC. Place fish
on the horizontal axis and chips on the vertical axis in the
diagrams involving indifference curves and budget lines.
(a) What is the equation for Nora’s budget line?
(b) The marginal utility of fish is MUF = 2C and the
Marginal utility of chips...

1.) Suppose if the price of a good is $12, the quantity demanded
is 50 units; when the price is $10, the quantity demanded is 100
units. Use the midpoint approach to compute the price elasticity of
demand. Is demand at this point relatively responsive or relatively
unresponsive to price changes?
2.) For this exercise you will need to first build a graph to
these specifications: Draw a downward sloping demand curve with
vertical intercept (0,4) and horizontal intercept (8,0)....

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