{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

HW2 - Jessica Dietz UTEID JAD2793 ECO 304K Homework 2...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Jessica Dietz UTEID: JAD2793 ECO 304K February 19, 2008 Homework 2 Question 1: a. b. This income effect is greater for Ryan for hair gel because it agrees with the overall quantity change. We also know that the income effect is greater because since we are told that the goods are complements, it is a rule that IE>SE for the good whose price didn’t change and since the price of mouthwash changed and the price of hair gel did not change and stayed the same the income effect is greater for hair gel.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Question 2: a. There is a shift in our graph on the demand curve because the information about applesauce decreasing cancer risks is good news. Since the information is good news the demand for applesauce will increase because consumers will go out and buy more applesauce so that their risk of cancer decreases. That is why our demand curve shifts up and we can see that because it shifts up, the price and quantity of applesauce also shifts up.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern