Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 6.A, Problem 13SQ
To determine
The slope of the budget line.
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Students have asked these similar questions
A decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph?
Select one:
OA. Parallel outward shift of the line
OB. Parallel inward shift of the line
OC. Decrease the horizontal intercept
COD. Increase the vertical intercept
Question 2
If the price of the good on the vertical axis rises
a. there will be a parallel shift inward of the budget line.
b. there will be a parallel shift outward of the budget line.
c. the budget line will become flatter.
d. the budget line will become steeper.
Draw two axes: on the horizontal axis (x-axis), represent the quantity of good x, and on the vertical axis (y-axis), represent the quantity of good y. Plot the initial budget line. The equation for the budget line is m = px * x + py * y. You can rearrange it to solve for y: y = (m - px * x) / py. With given values for m, px, and py, you can plot the line that represents all combinations of goods x and y that the consumer can afford. Plot the indifference curves. These curves represent the combinations of goods x and y that give the consumer the same level of utility. Due to the complexity of the given utility function U(x, y) = xy / (x + y), it may be challenging to plot the exact indifference curves. As an alternative, you can use a simpler utility function for demonstration purposes, such as U(x, y) = x^a * y^b (where a and b are positive constants), which results in easier-to-plot curves. Locate the initial optimal consumption bundle, which is the point where the budget line is…
Chapter 6 Solutions
Economics For Today
Ch. 6.1 - Prob. 1YTECh. 6.1 - Prob. 2YTECh. 6.2 - Prob. 1YTECh. 6.A - Prob. 1SQPCh. 6.A - Prob. 2SQPCh. 6.A - Prob. 3SQPCh. 6.A - Prob. 1SQCh. 6.A - Prob. 2SQCh. 6.A - Prob. 3SQCh. 6.A - Prob. 4SQ
Ch. 6.A - Prob. 5SQCh. 6.A - Prob. 6SQCh. 6.A - Prob. 7SQCh. 6.A - Prob. 8SQCh. 6.A - Prob. 9SQCh. 6.A - Prob. 10SQCh. 6.A - Prob. 11SQCh. 6.A - Prob. 12SQCh. 6.A - Prob. 13SQCh. 6.A - Prob. 14SQCh. 6.A - Prob. 15SQCh. 6 - Prob. 1SQPCh. 6 - Prob. 2SQPCh. 6 - Prob. 3SQPCh. 6 - Prob. 4SQPCh. 6 - Prob. 5SQPCh. 6 - Prob. 6SQPCh. 6 - Prob. 7SQPCh. 6 - Prob. 8SQPCh. 6 - Prob. 9SQPCh. 6 - Prob. 10SQPCh. 6 - Prob. 1SQCh. 6 - Prob. 2SQCh. 6 - Prob. 3SQCh. 6 - Prob. 4SQCh. 6 - Prob. 5SQCh. 6 - Prob. 6SQCh. 6 - Prob. 7SQCh. 6 - Prob. 8SQCh. 6 - Prob. 9SQCh. 6 - Prob. 10SQCh. 6 - Prob. 11SQCh. 6 - Prob. 12SQCh. 6 - Prob. 13SQCh. 6 - Prob. 14SQCh. 6 - Prob. 15SQCh. 6 - Prob. 16SQCh. 6 - Prob. 17SQCh. 6 - Prob. 18SQCh. 6 - Prob. 19SQCh. 6 - Prob. 20SQCh. 6 - Prob. 21SQCh. 6 - Prob. 22SQCh. 6 - Prob. 23SQCh. 6 - Prob. 24SQCh. 6 - Prob. 25SQ
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Similar questions
- If the consumer's income rises to $100 while the prices of pizza and cola are constant, then the budget line for pizza and cola would a. does not change b. rotate outward along the cola axis C. now intersect the horizontal axis at 10 pizzas and the vertical axis at 100 colas d. now intersect the horizontal axis at 12 pizzas and the vertical axis at 120 colasarrow_forwardAn increase in the price of good y would Select one: a. Shift the budget line b. budget line pivots from x-intercept to the left c. Shift the indifference curve d. budget line pivots from x-intercept to the rightarrow_forward25. Suppose there are two goods (X and Y). On a traditional graph of a budget line a tripling of all prices and incomes will a. alter the slope of the budget line only. b. alter the slope of the budget line as well as the Y-intercept. c. alter the slope of the budget line as well as the X-intercept. d. leave the budget line unaltered.arrow_forward
- Ersen likes to consume apples and bananas. Suppose Ersen's income doubles and the prices of apples and bananas also double. Ersen's budget line will Select one: a. shift inward but not change slope. b.shift outward and become steeper. c.shift outward but not change slope. d.remain unchanged.arrow_forward* Pepsi Pizza 1. Refer to Figure# 1. Which point in the figure showing a consumer's budget constraint represents the consumer's income divided by the price of a Pepsi? a. Point Y b. Point V c. Point Z d. Point Xarrow_forwardWhen the price of one'good Increases and the price of the other goot and income are held constant, the budget line Select one: rotates so that the intercept is farther from the origin on the axis representing the good that has experienced an increase in price shifts parallel to the original budget line so that the new budget line is closer to the origin b. rotates so that the intercept is closer to the origin on the axis representing the good that has experienced an increase in price C. d shifts parallel to the original budget line so that the new budget line is farther from the origin CLEAR MY CHOICEarrow_forward
- Given the following budget line pxx+pyy=m And that the slope of the budget line depends only on relative prices, show what happens to the budget line when: (a) px rises (b) m reduces (c) Both px and py rise by the same proportion (d) a consumer is given an in-kind transfer of 40 units of good y (e) the government imposes a quantity tax (t) on good y please take note of the imagearrow_forwardSuppose there are two goods, the prices of both goods are positive, and a consumer's income is also positive. If the consumer's income halves and the price of both goods triple, 4. a. the slope of the consumer's budget line does not change but the budget line shifts outward away from the origin. b. the consumer's budget line gets steeper and shifts outward. c. the slope of the consumer's budget line does not change but the budget line shifts inward toward the origin. d. the consumer's budget line gets flatter and shifts inward.arrow_forwardConsider a user maximizing their utility from two goods.If income were to double, and prices were to also double, the budget line would: a. remain the same. b. rotate inward. c. slant outwards in a parallel pattern d. slant inwards in a parallel patternarrow_forward
- 10- 8 Quantity of D A 6 2 0 2 6 8 10 4 Quantity of C Refer to the budget line shown in the diagram. Which of the following combinations of goods is unattainable for this consumer? 1 unit of C and 8 units of D 8 units of C and 4units of D 6 units of C and 2 units of D 2 units of C and 6 units of Darrow_forwardA movement to the North-West along a downward-sloping Engel curve in the (I, x1) plane corresponds to A. a parallel shift in the budget constraint. B. a decrease in utility. C. an increase in utility. D. a rotation in the budget constraint. both a and b. both a and c. both b and d. both c and d.arrow_forwardIf the consumer income is OR 656, price of good (X) is OR 56.6 and the price of good (Y) is OR 40, what is the quantity of good (Y) purchased by the consumer if he is only purchasing good (Y). a. 11.59 b. 0.06 c. 0.09 d. 16.40arrow_forward
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