Question

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 become flatter/ "shift" to the right

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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
Consider two goods, x and y. With the quantity of Y on the vertical axis and...
Consider two goods, x and y. With the quantity of Y on the vertical axis and the quantity of x on the horizontal axis, a negatively sloped price- consumption curve implies that A. x and y are inferior goods B. x and y are normal goods c. x and y are substitutes in consumption d. x and y are complements in consumption
Xavier considers lemonade (X) and iced tea (Y) to be normal goods and has convex preferences....
Xavier considers lemonade (X) and iced tea (Y) to be normal goods and has convex preferences. a. (10 pts) Design an indifference curve-budget line diagram showing the substitution and income effects created when the price of lemonade increases. In your diagram, place lemonade on the horizontal axis and iced tea on the vertical axis. Identify the initial optimal choice as (X*, Y*) and the optimal choice after the price increase as (X**, Y**). b. (4 pts) How can you tell...
3. Suppose you are trying to understand a person’s choices between spending on two goods, X...
3. Suppose you are trying to understand a person’s choices between spending on two goods, X and Y.  For each situation below, draw an indifference curve for the two goods in a graph with Y on the vertical axis and X on the horizontal axis. a. When the two goods are perfect substitutes to each other, b. When the two goods are perfect complements to each other, c. When the two goods are imperfect substitutes for each other, as in a...
Assume that the random variable X is normally​ distributed, with mean mu equals 53 and standard...
Assume that the random variable X is normally​ distributed, with mean mu equals 53 and standard deviation sigma equals 11. Compute the probability. Be sure to draw a normal curve with the area corresponding to the probability shaded. Upper P left parenthesis Upper X less than or equals 40 right parenthesis Which of the following shaded regions corresponds to Upper P left parenthesis Upper X less than or equals 40 right parenthesis​? A. X 4053 A normal curve has a...
Assume that the random variable X is normally​ distributed, with mean mu equals 53 and standard...
Assume that the random variable X is normally​ distributed, with mean mu equals 53 and standard deviation sigma equals 11. Compute the probability. Be sure to draw a normal curve with the area corresponding to the probability shaded. Upper P left parenthesis Upper X less than or equals 40 right parenthesis Which of the following shaded regions corresponds to Upper P left parenthesis Upper X less than or equals 40 right parenthesis​? A. X 4053 A normal curve has a...
Determine if the following statements A-E are true or false. A. If preferences over goods x...
Determine if the following statements A-E are true or false. A. If preferences over goods x and y are represented by U(x,y) = 3x1/2y1/3, the price consumption curve (as the price of x changes) is necessarily horizontal. B. If U(x,y)= 3 + ln(x) + 5y, the income consumption curve is vertical, assuming an interior solution. C. An upward sloping price consumption curve (as the price of good x changes) indicates that goods x and y are complements in consumption. D....
Suppose that desktop computers are normal goods and laptops are their substitutes. Assume that incomes of...
Suppose that desktop computers are normal goods and laptops are their substitutes. Assume that incomes of desktop users fall dramatically while the prices of desktop processors (which are used as inputs in desktop computer production) increase sharply. How would these developments affect the equilibrium quantity and price of desktop computers? The equilibrium quantity would fall, but the equilibrium price would be ambiguous. The equilibrium price would decrease, but the equilibrium quantity would be ambiguous (i.e. we would not be able...
A consumer has 100 dollars to spend on two goods, price of a sweater is $...
A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumer’s budget line has shoes on the vertical axis and sweaters on the horizontal axis; Determine the slope of the budget line _____ (give your answer in decimals) What is the vertical intercept of the budget line?________ What will be the effect of an increase of income on the budget line______ (use one of...
Assume the random variable X is normally distributed with mean mu equals 50 and standard deviation...
Assume the random variable X is normally distributed with mean mu equals 50 and standard deviation sigma equals 7 . Compute the probability. Be sure to draw a normal curve with the area corresponding to the probability shaded. Upper P left parenthesis Upper X greater than 39 right parenthesis LOADING... Click the icon to view a table of areas under the normal curve. Which of the following normal curves corresponds to Upper P left parenthesis Upper X greater than 39...