1. From the observation of one consumer behavior for several months of Year 1. In an...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. From the observation of one consumer behavior for several months of Year 1. In an economy where the prices of both kinds of goods fluctuate a lot according to the foreign currency exchange rate, it was found that the purchasing behavior of consumers is as follows: Situation Month 1, A Month 2, B Month 3, C Month 4, D Month 5, E P1 10 7 5 14 16 P2 10 14 17 13 14 X1 5 2 10 12 4 X2 5 6 2 2 10 1.1 Does this consumer have a well-behaved preference? Clearly analyze why. (8 points) 1.2 Suppose that during the 1st month of the 2nd year, the price of Product 1 drops by half the original price in the 1st month of the previous year, and the price of Product 2 doubles the price in the 1st month of the previous year. Consumers Decide on Product 1 for all 7 units and Product 2 for all 2 units. Use the Laspeyres quantity index to show whether the consumer's welfare has improved or worsened compared to the previous year, or it was unable to tell. (7 points) 1. From the observation of one consumer behavior for several months of Year 1. In an economy where the prices of both kinds of goods fluctuate a lot according to the foreign currency exchange rate, it was found that the purchasing behavior of consumers is as follows: Situation Month 1, A Month 2, B Month 3, C Month 4, D Month 5, E P1 10 7 5 14 16 P2 10 14 17 13 14 X1 5 2 10 12 4 X2 5 6 2 2 10 1.1 Does this consumer have a well-behaved preference? Clearly analyze why. (8 points) 1.2 Suppose that during the 1st month of the 2nd year, the price of Product 1 drops by half the original price in the 1st month of the previous year, and the price of Product 2 doubles the price in the 1st month of the previous year. Consumers Decide on Product 1 for all 7 units and Product 2 for all 2 units. Use the Laspeyres quantity index to show whether the consumer's welfare has improved or worsened compared to the previous year, or it was unable to tell. (7 points)
Expert Answer:
Answer rating: 100% (QA)
11 This consumer has a wellbehaved preference because they are always willing to purchase more of go... View the full answer
Related Book For
Posted Date:
Students also viewed these marketing questions
-
In the analysis of Exercise 17.28, it was found that 9 of the sampled technical pages and 15 of the sampled nontechnical pages contained no errors. Find a 90% confidence interval for the proportion...
-
From telephone interviews with 980 adults, it was found that 78% of those persons supported tougher legislation for antipollution measures. Does this poll substantiate the conjecture that more than...
-
In a recent study by MIT, it was found that the Toyota Prius, a hybrid, was less environmentally responsible than a Hummer SUV. How could this be? You might want consider using the AT&T Environmental...
-
The MRP gross requirements for Item A are shown here for the next 10 weeks. Lead time for A is three weeks and setup cost is $ 10. There is a carrying cost of $ 0.01 per unit per week. Beginning...
-
In Geoforum (Vol. 37, Nov. 2006), Simon Fraser University professor Nicholas Blomley assessed whether the price of a geography journal is correlated with quality. He collected pricing data (cost for...
-
The Village Hat Shop Limited counted the entire inventory in its store on August 31 and arrived at a total inventory cost of $66,000. The count included $6,000 of inventory held on consignment for a...
-
Discuss why AIDS is a reportable disease.
-
Consider the following information about three stocks: a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The...
-
Prepare an income statement for the year. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).) Revenues (a2) Service Revenue Rent Revenue Total...
-
Daniel Company uses a periodic inventory system. Data for 2015: beginning merchandise inventory (December 31, 2014), 2,000 units at $38; purchases, 8,000 units at $40; expenses (excluding income...
-
1. Either expansionary fiscal policy or a currency depreciation will increase domestic national income by decreasing the level of foreign output demanded. Comment on this statement. 2. A...
-
Factor completely. 49x - 28xy +4y
-
Solve y (3y+10) - 8 = 0 by using the Quadratic Formula.
-
Find the variance of the data. 465, 460, 497, 462, 462, 474 x = 470 Variance (02) = [?]
-
Preparing closing entries and a post - closing trial balance LO P 6 Following are accounts and year - end adjusted balances of Cruz Company as of December 3 1 . 1 . Prepare the December 3 1 closing...
-
A pitot tube with a coefficient of 0.95 is used to measure the velocity of air in a ventilation duct. The differential pressure head measured by the pitot tube is 1 ft. What is the air velocity
-
Sunland Company had the following two transactions related to its delivery truck. 1. 2. Prepare Sunland's journal entries to record these two transactions. (List debit entry before credit entry....
-
Synthesize the products by drawing out reagents and intermediates along the way. `N H. OH HO HO
-
Use the accompanying graphs to illustrate the effects of imposing a tariff on imports on the domestic price, the domestic quantity purchased, the domestic quantity produced, the level of imports,...
-
Which one of each of the following pairs of assets is most liquid? a. Microsoft stock or a traveler's check b. A 30-year bond or a six-month Treasury bill c. A certificate of deposit or a demand...
-
Sid moves from New York City, where he lived in a small condominium, to rural Minnesota, where he buys a big house on five acres of land. Using the law of demand, what do you think is true of land...
-
When translating Acceletrons fi nancial statements into US dollars, Redline is least likely to use an exchange rate of USD per SGD: A . 0.671. B . 0.588. C . 0.654.
-
Based on Exhibit 1, what is the foreign exchange gain resulting from Transaction 3 on the December 31, 2016 fi nancial statements? A . NVK1.70 per ton B . NVK90.75 per ton C . NVK248.54 per ton
-
Which transaction would generate foreign currency transaction exposure for Ambleu? A . Transaction 1 B . Transaction 2 C . Transaction 3
Study smarter with the SolutionInn App