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pts Mark each of these statements about normal goods as true or false: Normal goods always have a price inelastic demand curve (Select] Normal goods always have a positive income elasticity of demand [Select] Normal goods always have a negative income elasticity of demand (Select] [ Select] Normal goods always have a price elastic demand curve
pts Mark each of these statements about normal goods as true or false: Normal goods always have a price inelastic demand curve (Select] Normal goods always have a positive income elasticity of demand [Select] Normal goods always have a negative income elasticity of demand (Select] [ Select] Normal goods always have a price elastic demand curve.
Suppose that a consumer's preferences follow the "basic properties of consumer's preferences" and that she has "nice indifference curves" (meaning: "convex indifference curves"). Which of the following sentences are True/False? For each statement, consider that e > 0: The consumer is indifferent between (100+ €, 25) and (100, 25) (Select] The consumer strictly prefers (100+ €, 25) to (100, 25) [Select] The consumer is indifferent between (100,25+ e) and (100+ €, 25) [ Select) The consumer is indifferent between (100+ €, 25) and (25, 100+ €) [Select] The consumer weakly prefers (100+ €, 25) to (100, 25) (Select) If the consumer is indifferent between (100,25) and (25, 100) then the bundle (85, 45) is weakly preferred to (100, 25) and (25, 100) (Select]
Question 3 0.1 pts Andrew's preferences are such that he is always indierent between watching two movies (X) or seeing one football game. Which of the following sentences are True/False? Considering that Andrew is consuming (optimally) some positive amount of good X and some positive amount of good Y, if the price of good X relative to good Y triples, Andrew would optimally decide to not consume good Y Select ] If Andrew's income is $90 and prices are PX = $10 and PY = $18, Andrew's demand for movies is V equal to 5. [Select] If Andrew's income is now $180 and prices are PX = $10 and Py = $18. Andrew's demand for football games is equal to 10. (Select] If Andrew is consuming (optimally) some positive amount of good X and some positive amount of good Y, the price of Y is half the price of good X. (Select] If Andrew's income is $90 and prices are PX - 8$ and PY= $18. Andrew's demand for movies is equal to 12. Select]
Expert Solution
Question 1:
Normal goods always have a price inelastic demand curve
-> False
?????Normal goods always have a positive income elasticity of demand
-> True
Normal goods always have a negative income elasticity of demand
-> False
Normal goods always have a price elastic demand curve.
-> False
Question 2
The consumer is indifferent between (100 + e, 25) and (100, 25)
-> False. (100+e,25; > 100, 25); as e>0.
The consumer strictly prefers (100 + e, 25) to (100, 25)
-> True. (as e>0, so consumer strictly prefers (100+e,25) to ( 100, 25)
The consumer is indifferent between (100,25 + e) and (100 +e, 25)
-> False ( 100+e is not same as 25+e, if both the goods are not perfect substitutes)
The consumer is indifferent between (100 + e, 25) and (25, 100 + e)
-> False ( no preference pattern is mentioned) and it's not an example of monotonicity of preference.
The consumer weakly prefers (100 + e, 25) to (100, 25)
-> True. (100+e,25 is at least as good as (100, 25)
If the consumer is indifferent between (100, 25) and (25, 100) then the bundle (85, 45) is weakly preferred to (100, 25) and (25, 100)
-> True. (The increase in one bundle is more than less than other commodity)when we compare the bundles (100,25; 25,100) with ( 85, 45)
Question 3
Considering that Andrew is consuming (optimally) some positive amount of good X and some positive amount of good Y, if the price of good X relative to good Y triples, Andrew would optimally decide to not consume good Y
-> True
If Andrew's income is $90 and prices are PX = $10 and PY = $18, Andrew's demand for movies is equal to 5.
-> False
If Andrew's income is now $180 and prices are PX = $10 and PY = $18, Andrew's demand for football games is equal to 10.
-> True
If Andrew is consuming (optimally) some positive amount of good X and some positive amount of good Y, the price of Y is half the price of good X.
-> False
If Andrews income is $90 and prices are PX = 8$ and PY = $18, Andrews demand for movies is equal to 12.
-> False
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