1. Hannah consumes only Burgers and Soda. (Put B on the horizontal axis and S on...
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1. Hannah consumes only Burgers and Soda. (Put B on the horizontal axis and S on the vertical axis). Her utility function is U(S,B) = S*B. The price of Burgers is PB and the price of Sodas is P, and her income is Y. 1a. Hannah's income is Y=200, and P₁=1, and PB =5. If P, rises to 5 but PB falls to 4, what are the total, income, and substitution effects of this change in prices on the demand for sandwiches? Calculate your answers and show the results on a graph. 1. Hannah consumes only Burgers and Soda. (Put B on the horizontal axis and S on the vertical axis). Her utility function is U(S,B) = S*B. The price of Burgers is PB and the price of Sodas is P, and her income is Y. 1a. Hannah's income is Y=200, and P₁=1, and PB =5. If P, rises to 5 but PB falls to 4, what are the total, income, and substitution effects of this change in prices on the demand for sandwiches? Calculate your answers and show the results on a graph.
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Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
Posted Date:
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