Title: The increase in consumption of a good when its price falls is caused by two effects. What are these ...
Post by: rsbains on Oct 9, 2019
Question 1.
The increase in consumption of a good when its price falls is caused by two effects. What are these two effects? Explain the difference between these effects.
Question 2.
Figure 10-1
Refer to Figure 10-1. Which of the following statements is true?
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Quantity Q0 could be a utility-maximizing choice if the price is $5.75, but quantity Q1 may not be because we have no information on the marginal utility per dollar when price changes.
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Quantities Q0 and Q1 are the utility-maximizing quantities of hoagies at two different prices of hoagies.
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Quantities Q0 and Q1 may not necessarily be the utility-maximizing quantities of hoagies at two different prices because we have no information on the consumer's budget or the price of other goods.
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Quantities Q0 and Q1 are derived independently of the utility-maximizing model.
Title: The increase in consumption of a good when its price falls is caused by two effects. What are these ...
Post by: wasan on Oct 9, 2019
Title: The increase in consumption of a good when its price falls is caused by two effects. What are these ...
Post by: rsbains on Oct 9, 2019