• Card 3 / 8: As a college student you work at a part-time job, but your parents also send you a monthly "allowance." Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?

    Answer:
    This is a negative income effect. Because your parents' check failed to arrive, your monthly income is less than normal and your budget constraint shifts in toward the origin. If you only buy normal goods, the decrease in your income means you will buy less of every product.

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Questions & Answers

explain equilibrium price
Philiswa Reply
what can the government do to allocate efficient resources?
Bandile Reply
If product A and B are substitutes, products B and C are complements and the markets for products A and C are unrelated, which one of the following statements regarding the markets for products A, B and C
Yandisa Reply
If the movement of the supply curve for product A took place but the price failed to adjust to the new level of market equilibrium what would likely be witnessed in the market?
Yandisa
features of monopolistic market
kalu Reply
monopolistic market is a market whereby there's only one seller in the system
Adeleye
how to compute average Total cost
Diwa Reply
Average Total Cost (avc) is just equal to the total price of the firm divided by the quantity (Q) sold. i.e avc=TC/Q
Rei
implication of ordinal utility and cardinal Utility
Nicholas Reply
Where income and car price are measured in thousands, and the price of bus travel is measured in average dollars per 100 miles traveled. Assuming the average automobile price is $22,000, income is $40,000, the price of bus travel is $25, and the price of gasoline is $3, calculate and interpret the i
Ali Reply
law of demand with help of table and diagram?
Qasim Reply
may have just failed the exam
YouTube
What is timeshare real estate
Steevin Reply
what's the formula for cross price elasticity
Boadi Reply
elastic
Selma
price elasticity of demand greater than 1
Kamugisha Reply
elastic
Selma
hi want to join this group
Hasan Reply
yes
Nasreen
Yes
Bamidele
yes
Cuthbert
yes
Rei
scarcity of economic resources
Kojo Reply
yes
Mohd
ys
Nasreen
yes
Nyande
hlo
Kamugisha
Where income and car price are measured in thousands, and the price of bus travel is measured in average dollars per 100 miles traveled. Assuming the average automobile price is $22,000, income is $40,000, the price of bus travel is $25, and the price of gasoline is $3, calculate and interpret the i
Ali
why don't use points on the indifference curve as consumer equilibrium?
Abera Reply
Production function y=Xå what are values of a supperscript to make the production function legitimate?
Mbuthia Reply

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Microeconomics 06 Elasticity

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