Answer to Question #125125 in Microeconomics for Ubaid

Question

Need help solving these

1. Show that Px ↑ -> U ↓

2. A consumer has an income of $100. When Px = $2 and $4 , her consumption bundle is (X , Y) = (20,15) . Suppose her income increases to $220, Px increases to $5 and PY increases to $8. With the aid of a diagram, determine how would her utility be affected?

3. In his current job, Smith can work as many hours per day as he chooses, and will be paid $1/hr for the first 8 hours, $4/hr for each hour over 8 hours. Faced with this payment schedule, Smith chooses to work 12 hours per day. If Smith is offered a new job that pays $2/hour for as many hours as he chooses to work, will he take it? Explain in detail with an aid of a diagram.

4. Let $10, Px =$1 and Py = 1 . Suppose income and the prices of the goods change at the same time. Let I' = $20, Px' = $2.5 and Py' = $2.5, will the consume

Answer 1

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