Label the substitution and income effects

Reference no: EM13488689

Suppose the price for the compact disks CD is 7.5 each. suppose the price for downloading tracks of music legally is 1 for each song. Guy x has 30 to spend each month on music. draw the budget constraint on the graph paper provided with cds on the horizontal axis. suppose the price of downloaded tracks rises to 1.5. draw the new budget line. show using indifference curves the beginning and ending utility maximizing choices and the substitution on income effect given that downloaded tracks are inferior but not giffen goods. both are economic good. label the substitution and income effects.

Reference no: EM13488689

Questions Cloud

Which situation does pam prefer : Will Pam be able to buy and want to buy 30 cookies and 5 granola bars next week?

Requirements of section 404 : Research a public company and explain how management reports on internal control in order to meet the requirements of Section 404.

Difference in treatment of identifiable and unidentifiable : How much depreciation will be taken each year if the straight-line method of depreciation is used? Show calculations. "

What is the index of refraction for deep violet light : A narrow beam of white light is incident at 30? on a 11.0cm -thick piece of glass. What is the index of refraction for deep violet light

Label the substitution and income effects : Label the substitution and income effects.

Classify all manufacturing costs and selling : Prepare a contribution margin income statement separating all variable and fixed costs into their own categories and what would you do and what concerns would you have going forward

Compute the direction of the induced current : A 1000-turn loop (radius = 0.032 m) of wire is connected to a (20 ohm) resistor, What is the direction of the induced current

Find the index of refraction of the blue light : A beam of light with red and blue components of wavelengths 670 nm and 425 nm, respectively, strikes a slab of fused quartz at an incident angle of 37°. what is the index of refraction of the blue light

Determine the angular separation of the two stars : A telescope can be used as a camera if the film is placed at the image position of the objective lens (or mirror); what is the angular separation of the two stars

User Account

All Pages