micro online short answer quiz ch21 consumer choice (2) - Word Sign in -0 × File

Question

micro online short answer quiz ch21 consumer choice (2) - Word Sign in -0 × File Insert Draw Design Layout References Mailings Review View Tell me what you want to do OFind Cut Copy Fonmat Painter IAaBbCcDReplace Paste :-. ? ??. Normal TNo Spac Heading 1 Hending 2 Title Subtitle Subtle Erm Emphasis ; Clipboard Font Paragraph Editing Consumer preferences Quantty ot M&Ms; Show your work and explain answers. 10 4. If a price changes and John switches from point A to point B, are skittles a normal or inferior good? Show the Income and Substitution Effects othe graph. What are normal and inferior goods? M&Ms; 10 12 35 678910 Quantty of Sittles John's preferences are described by the above graph. 1. If John's budget is $50 and his optimum bundle is A, what are the prices of the two goods? 2. If John's budget is $50 and his optimum bundle is B, what are the prices of the two goods? 3. What change would move John's optimum consumption bundle to move from A to B? 9 0 uantly, of Skittles Page 1 of 1 122 words + 100% 1:05 PM 6/15/2018

Explanation / Answer

Ans 1)

If Budget is $50 and Optimal point is A then Price of two goods are as follows Price of sittle= $5 and Price of M&M is =$5

Ans 2)

If Budget is $50 and Optimal point is B then Price of two goods are as follows Price of sittle= $5 and Price of M&M is =$5

Budget Constraint=M=P1X1+P2X2=50=PmQm+PsQs

Ans 3)

Price change in M&M

Ans 4)

As Price decreases consumption of that good increases hence it is a normal good

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.