Solution 1 ECN 100 Homework 3 This homework covers the essentials of Chapter 3 in the textbook and the associated lecture material A basic notion in
Solution ECN Homework This homework covers the essentials of Chapter in the textbook and the associated lecture material
Solution ECN Homework This homework covers the essentials of Chapter in the textbook
homework covers the essentials of Chapter in the textbook and the associated lecture material A basic notion in
Solution ECN Homework This homework covers the essentials of Chapter in
the textbook and the associated lecture material A basic notion in
Solution ECN Homework This homework covers the essentials of
Solution ECN Homework This
(Solution) 1 ECN 100 - Homework #3 This homework covers the essentials of Chapter #3 in the textbook and the associated lecture material. A basic notion in...

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This is a homework for Advanced Microeconomics, please I need the answer for them to prepare for final (which is coming next week), any one, please help. They don't have to be really long explanation, just some graphs and simple explanation will do. Thanks!ECN 100 – Homework #3 This homework covers the essentials of Chapter #3 in the textbook and the associated lecture material. A basic notion in micro-economics is that Demand Exists – that is, we all desire to consume products at some level and at some lifestyle. Some people strive to consume a lot. Others strive to, or must, live lives with less consumption. But even the most simple of lives depend on the acquisition and use of some goods (like, say, food and antibiotics), so as I say – Demand Exists . In this homework, we look the basic theory and issues behind the notions of consumer demand curves. (1) What does “homogeneity” of demand mean? If the prices of all goods rises by 10% and you get a 10% income raise, what happens to your “real” income and purchasing power. If you were to represent this situation on an indifference map as you consumed goods X and Y, how would you show it? (2) You consume two goods, X and Y. You really prefer X to Y. Also for you Y is an Inferior good. X is a Normal good. Starting from an initial position of equilibrium, you face a sudden rise in income. Go re-establish a new equilibrium. How would you represent all of this on your indifference map? (3) You are in equilibrium on your indifference map with respect to X and Y. Your income does not change, but the price of X falls . You move to a new point of equilibrium on the indifference map. Show: ? Where you end up if both X and Y are normal goods. ? Where you end up if X is inferior but not a Giffen good. ? Where you end up if X is inferior and is a Giffen good. Now: Show the impact of the income and substitution effects with respect to your consumption of the good X in each of the three cases. How are the substitution effects different in each of these three two cases? (4) What is a Giffen Paradox? If the good X is subject to a Giffen Paradox, show with indifference curve, how you would respond to a sudden rise in the price of X . Show the income and substitution effects with respect to your consumption of X after the price rise. (5) 1

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