Microeconomics Answers

What causes a shift in the demand curve

An individual spends his income on three goods.  He buys 550 units of X at $1 per units,425 units of Y at $2 per month units, and 200 units of Z at $3 per unit.  He now buys 440 units of Y and 190 units of Z.  Calculate his price elasticity of demand for X. 

Show your answers through graphs. Dont forget to put labels of each of the curves if its:

D  (original demand)      D1  (rightward/increase)      D2    (leftward/decrease)

S   (original supply)        S1  (outward/increase)        S2   (inward/decrease)

(no need to put the set of prices and set of quantities, just show the price and quantity axis and the curves per item) 

*Suppose the prices of condensed milk and cream used in the production of mango float falls from 35 php to 30 php., the consumers are motivated to __ the quantity. What about the producers willingness and ability to produce condensed milk and cream considering the fall in prices?

Suppose Lionel Messi was making the choice of how many hours to practice. Messi knows that there is a positive relationship between the number of hours he practices and the number of goals he scores in a season at Barcelona. Numbers in the table below denote combinations of free time and goals for Lionel Messi, given his preferences of goals vs free time is known and his ability is unchanged within the season. There are no lucky goals, his productivity only depends on the number of hours he practices.

X Y Z

Free Time 12 21 18

Goals 95 41 68

MRT 3 9 6

MRS 25 4 6 

At point X, will Messi want to increase his consumption of free time or reduce it? Why? 

At point Y, will Messi want to increase his consumption of free time or reduce it? Why? 

At point Z, will Messi want to increase his consumption of free time or reduce it?

Why?