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Suppose John have R1 800 to spend on two goods: shoes, and shirts and that the price of a pair of shoes is R120 and the price of shirt is R100. (i). Given total income and prices of two goods, how many pairs of shoes will John obtain if he decides to use all of his income on shoes and how many units of shirts will he afford if he decides to buy shirts only?What will happen to John’s budget line if the price of shoes (measured on horizontal axis rise from R120 to R180? Explain by stating numerical figures.
The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good.
a. How will the demand for good X change if consumer incomes decrease?
b. How will the demand for good Y change if consumer incomes increase?
c. How will the demand for good X change if the price of good Y increases?
d. Is good Y a lower-quality product than good X? Explain.
*DVDs and TV screens
*DVDs and movie tickets
*TV Screens and movie ticket
Explian the two assiciated concept used to determine the satisfaction or utility of a consumer.
Find the slope of an assumed linear demand curve for theater tickets, when persons purchase 1,000 at $5.00 per ticket and 200 at $15.00 per ticket.
equations:
Qx = 20000 - 10000 Px + 10 I + 1000 Pc
Where Px is the price charged for Raza pastries, I is income per capita and Pc is the price of books from competing publishers. Using this information, the company's managers want to:
(a) Determine what effect a price increase would have on total revenues.
(b) Evaluate how sale of pastries would change during a period of raising income.
(c) Assess the probable impact if competing producers raise their prices. Assume that the initial values of Px = $8, I = $18000 and Pc = S10
