econ100 mid review

econ100 mid review - B budget line shifts right because...

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The more users exist the more benefit to me- indirect network extenuative Causes demand curve to shift right Sample essay question Explain what would happen to the equilibrium consumption of two goods, x and y, if (a) income doubled and all prices tripled, (b) all prices doubled and income tripled, and (c) all prices and income doubled. In each case, show the effects when both goods are normal goods and when one is good is a normal good and the other an inferior good. Please support your answers with the use of graphs if necessary. A( the graph’s income doubled the demand will go up Since the prices tripled the demand will go down . - if the goods were normal nothing would happen cuz the price still tripled.
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Unformatted text preview: B budget line shifts right because prices go up less then ur income goes up c)nothing will change because budget line wont change?? Answers***\\ A(when both goods are normal, the consumption of both goosds will decline. Thewn one goods infereior, consumption of the inferior good will increase and the consumption of the normal good will decrease B(when both goods are normal, consumption of both goods will increase. When one of the goods ins inferior consumption of the normal good will increase and consumption of the inferior good will drcrease C(nothing will hpapnnen to the consumption of either good....
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