EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 2.8, Problem 1MQ
To determine
To find: The reason for trade for one commodity in order to get an additional unit of another commodity and apply it in the case of music CDs and DVDs.
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Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys more beer when the price of beer goes up, then beer must be an inferior good for Frodo. If, on the other hand, he buys less beer when the price of beer goes up, then beer must be a normal good for Frodo. Sofia disagrees: "Normal and inferior goods are about income changes, not price changes. Therefore, we do not have enough information: beer could be an inferior or normal good in either of these cases."
Do you agree or disagree? Carefully explain your point of view. Support your argument with graphs of income, substitution and total effects (please put beer on the horizontal axis and the other goods on the vertical axis).
Please assume that Frodo's preferences over beer and other goods are strictly convex and satisfy "more is better" assumption.
4. 1).Find the marginal utility of each of the two commodities? If the two commodities are free, what are the consumed quantities of the two commodities?
2) .If the price of X is two Riyals and the price of Y is 4 Riyals, and the income is 32, find the equilibrium quantities?
3) .If the price of Y drops to two Riyals, find the equilibrium quantities? Explain the graph?
If the consumer is consuming exactly two goods, and she is always spending all of her money, can both of them be inferior goods?
Chapter 2 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 2.1 - Prob. 1TTACh. 2.1 - Prob. 2TTACh. 2.3 - Prob. 1MQCh. 2.3 - Prob. 2MQCh. 2.3 - Prob. 1TTACh. 2.3 - Prob. 2TTACh. 2.3 - Prob. 1.1MQCh. 2.3 - Prob. 2.1MQCh. 2.5 - Prob. 1TTACh. 2.5 - Prob. 2TTA
Ch. 2.7 - Prob. 1MQCh. 2.7 - Prob. 2MQCh. 2.7 - Prob. 3MQCh. 2.8 - Prob. 1MQCh. 2.8 - Prob. 2MQCh. 2.8 - Prob. 1.1MQCh. 2.8 - Prob. 2.1MQCh. 2 - Prob. 9RQCh. 2 - Prob. 2.1PCh. 2 - Prob. 2.2PCh. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.7PCh. 2 - Prob. 2.8PCh. 2 - Prob. 2.9PCh. 2 - Prob. 2.10P
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