Boom Time For Gently UsedClothes
Most retailers are blaming the economy for their poor sales, but one
store chain that sells used name-brand childrens clothes, toys, and
furniture is boldly declaring that an economic downturn can actually
be a boon for it
Marc has a budget of $20 a month to spend on root beer and DVDs. The price of
root beer is $5 a bottle, and the price of a DVD is $10.
What is the relative price of root beer in terms of DVDs and what is the
opportunity cost of a bottle of root beer?
The
Discuss the shape of the indifference curve for each of the following pairs of
goods. Explain the relationship between the shape of the indifference curve
and the marginal rate of substitution as the quantities of the two goods
change.
Orange juice and sm
Saras income falls from $12 to $9 a week, while the price of popcorn is unchanged at
$3 a bag and the price of a smoothie is unchanged at $3.
What is the effect of the fall in Saras income on her real income in terms of
smoothies?
Saras real income falls
Saras income is $12 a week. The price of popcorn is $3 a bag, and the price of a
smoothie is $3.
Calculate Saras real income in terms of smoothies. Calculate her real
income in terms of popcorn.
Saras real income is 4 smoothies. Saras real income in terms
What do we call the magnitude of the slope of an indifference curve?
The magnitude of the slope of an indifference curve is called the
marginal rate of substitution (MRS). The MRS measures the rate at which the
consumer gives up one good to get more of an
If a households money income changes and prices do not change, what
happens to the households real income and budget line?
A households real income is the households income expressed as a quantity
of goods the household can afford to buy. For example, the
What does a households budget line show?
The budget line plots combinations of goods that require all a households
income and describes the limits to its consumption choices.
How does the relative price and a households real income influence its budget li
Saras income is $12 a week. The price of popcorn rises from $3 to $6 a bag,
and the price of a smoothie is unchanged at $3.
What is the effect of the rise in the price of popcorn on Saras real
income in terms of smoothies and her real income in terms of
p
Pam has made her best affordable choice of cookies and granola bars. She spends
all of her weekly income on 30 cookies at $1 each and 5 granola bars at $2 each.
Next week, she expects the price of a cookie to fall to 50 and the price of a
granola bar to r