Derive a demand function, Microeconomics

Assignment Help:

Zac consumes only pizza and chianti. He consumes these goods in fixed proportions: 2 slices of pizza for one glass of chianti. His income is $100 per week.

a. Derive demand functions forpizza and chianti. Are the goods normal or inferior, substitutes or complements?

b. If pizza costs $1 per slice and chianti $3 per glass, how much of each good will he consume?

c. If the price of pizza falls to $0.5 per slice and, chianti stays at $3 per glass, how much of each good will Zac consume?

d. Using a suitably labelled diagram with pizza on the horizontal axis, illustrate the impact of the change in price of pizza from $1 to $0.5 per slice. Show the level of utility before and after the price change and show the decomposition line.


Related Discussions:- Derive a demand function

Find the marginal utilities, An individual derives utility from consuming g...

An individual derives utility from consuming goods X and Y according to the following estimated utility function U = 12X 2/3 Y ¼       X and Y are quantities (units) of

Investment.., a reduction in investment spending would lead to

a reduction in investment spending would lead to

Consumer equullibruim, income=100 price of x=5 price of x2=10 find consumer...

income=100 price of x=5 price of x2=10 find consumer equilibrium with diagram

Illustrate about the elasticity of substitution, Illustrate about the elast...

Illustrate about the elasticity of substitution. The Elasticity of Substitution: The technical substitution’s marginal rate measures the slope of an isoquant. As well the el

ECON Worksheet, Deadline is 20 Hours... 1. A. Explain how one derives the...

Deadline is 20 Hours... 1. A. Explain how one derives the indifference curves from a 3-dimensional utility function. Draw a graph and explain. Which principle explains the concav

Find the highest interest rate, Find the highest interest rate: There ...

Find the highest interest rate: There are 2 entrepreneurs, Sally and Paul.  The return to their projects are given by: To finance the project, each entrepreneur needs

OLIGOPOLY, EXPLAIN KINKED DEMAND CURVE

EXPLAIN KINKED DEMAND CURVE

Elasticity, Five uses of elasticity on the Public Sector and five uses of e...

Five uses of elasticity on the Public Sector and five uses of elasticity on the Private Sector.

Economics, Tc and TVC curves have an inverted s-shape

Tc and TVC curves have an inverted s-shape

Supply and demand, During the 1990s, technological advance reduced the cost...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd