A universal assumption in economic theories is that a) people are motivated by self-interest b) what is true for one person must be true for everyone c) whatever goes up must come down d) as price increase, quantity demanded decreases
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16. A universal assumption in economic theories is that
a) people are motivated by self-interest
b) what is true for one person must be true for everyone
c) whatever goes up must come down
d) as price increase, quantity demanded decreases
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- 3) Now suppose you have $500 to spend. You can buy computer software, which costs $50 or go on a ski trip for $100. Draw the budget set, labeling the end points. Just a pick a point on the budget set and tell how much of each good you bought. Suppose you now have $700 to spend. Draw the new budget set and pick a point for this budget set. Are you buying more or less software and ski trips after the income change?1. Suppose you earn $1500 per week and you consume only two types of goods per week- sandwiches and orange juice, which you purchase at a mini mart. Each sandwich cost $150 and an orange juice is $75 per cup. a) Construct a table showing the alternative combinations of the two products that are available. b)Plot the data in your table on a budget line. What is the slope of the budget line? What is the opportunity cost of one more cup of orange juice? And what is opportunity cost of one more sandwich? Do these opportunity cost rise, fall or remain constant as you purchase an additional unit of the product? c)Suppose the price of a cup of orange juice increased to $150. Construct a new table showing alternative combinations of sandwiches and orange juice. Construct the new budget line.Reference Microeconomics Mankiw Chapter 21 The theory of Consumer Choice Assume that Sarah is awake for 100 hours per week. a.) Use a diagram to show Sarah’s budget constraints if she earns $6 per hour, $8 per hour, and $10 per hour. Your diagram should have consumption (as measured in dollars) on the y-axis and hours of leisure per week on the x-axis. Do not count the time that Sarah sleeps as “leisure” in your analysis. Assume that Sarah allocates each of the 100 hours that she is awake each week either to labor or to leisure. b) Now draw indifference curves on your diagram such that Sarah’s labor supply curve is upward sloping when her wage is between $6 and $8 per hour, but is downward sloping when her wage is between $8 and $10 per hour. c) Use words to explain why your graph suggests that the supply curve is upward sloping when the wage is between $6 and $8 per hour and is downward sloping when the wage is between $8 and $10 per hour.You do NOT need to draw the corresponding…
- 4: What are five fundamental questions (and answers) in economics? Five fundamental questions How do market system answer the question? 1. 2. 3. 4. 5. Chapter 3 starts here. Define "demand" and State the law of demand. Demand is a (s (w_ specified period of (t d ) or a curve which shows the various amounts of a product buyers are ) to purchase at each price in a series of possible prices during a ) and (a ). Demand portrays relationship between ), they are (positively, negatively) related either in the table or in the ( graph ). The law of demand states that, other things being equal, as price increases, the corresponding quantity demanded (rises, falls). Restated, there is a (an) ( direct, inverse ) relationship between price and ) and ( q. quantity demanded with everything else held constant.(9) What determines the utility an individual receives from consuming a good? Select one: a. The individual’s own preferences. b. The demand and supply curves for that good. c. The producers conducting customer feedback surveys of that good and the feedback provided. (10) Denzel bought headphones two months ago, Solo2 Beats by Dre, for $130. He gives them to his little brother and goes online to buy another for himself but they are now $160. What is the percentage change in the headphone’s price? Select one: a. 23% b. 30% c. 21%You have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below. Economics Hours Psychology Score 58 64 Score Hours 58 66 1 1 73 69 73 76 78 79 79 84 4 5. 88 9. 91 a. Use the rule for determining optimal purchases to decide how many hours you should study each subject Treat each point on an exam like 1 unit of utility and assume you are equally interested in doing well in economics and psychology. You should study economics for 6 hours and psychology for 5 hours.
- What is the definition of marginal utility? A. The average utility from consuming a good or service multiplied by the number of units of that good or service consumed. B. Utility measured in utils. C. The utility from consuming a good or service divided by the number of units of that good or service consumed. D. The change in utility from consuming an additional unit of a good or service. E. The enjoyment or satisfaction people receive from consuming goods and services.what are the units of a good? what are the units of b good? what are the units of c good? the total utility of consuming five units of the b good is what utils? the total utility of consuming three units of the a good is what utils?5. Consider the market for pizza.a. Start in Equilibrium (be sure to label all relevant points)b. Change at least one of the ceteris paribus conditions. Assuming pizza and beer go well together, consider the market for pizza if the price of beer goes up.c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________d. Identify the change(s) in direction, and draw into the above market.e. Finish in equilibrium. What are the effects on price and quantity?
- 1. Say that there are two goods in the world, books and video games. Say that we observed two of Jim's choices: he chooses bundle A from the budget set bounded by budget line 1, and the bundle B from the budget set bounded by budget line 2. video games B A budget line 2 budget line 1 books a) For each of the two goods, based on the diagram: is the good normal, inferior, or we can't say for sure? Is the good ordinary, Giffen, or we can't say for sure? Explain. b) For which of the two budget lines is the opportunity cost of a book higher and why? What does that statement mean in the context of this model?True/False 1. it is necessary assumption and economics that consumers prefer higher quantities a good to lower quantities of that good for all goods1. Assume that when the price of X decreases the consumption of Y remains the same. Draw the appropriate indifference curves and budget lines, label the axes, and the optimal consumptions. Also, in your graph show and label the price-consumption curve. How would you determine, using your graph, if X is a normal good? Explain