Question

Suppose that there are two kinds of cars: cheap cars that get lousy gas mileage and...

Suppose that there are two kinds of cars: cheap cars that get lousy gas mileage and expensive
cars that get good mileage.
5. On the same diagram, draw your budget constraint between “miles driven” and “all other
goods” when you own a cheap car, and when you own an expensive car.
6. Considering that you get to decide which kind of car to own, draw your budget constraint
between “miles driven" and “all other goods". Use the same diagram you drew to answer
question 5.
7. Suppose that the price of gasoline goes up, and you respond by increasing your
purchases of gasoline. True or False: This means that gasoline is a Giffen good for you.

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Answer #1

7. if the price of gasoline goes up and we respond with more consumption of gasoline . it means that gasoline is so inferior for me that I start consuming more of it as the price of gasoline increases. therefore it is true that gasoline is giffen good for me.

Dear student/learner, According to our protocol I am obliged to solve only one question. you can post the other questions separately. It would be our pleasure to help you solve the other questions. morever, questions 5 &6 need more information to solve.
t was my great pleasure to help you solving this problem. I wish you best luck for your learning endeavour.
Happy Learning

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