a.Explain (in words, without using diagram) what would happen to the equilibrium consumption of two goods X and Y if

i) income doubled and all prices tripled,

ii)all prices doubled and income tripled, and

iii) all prices and income doubled

in each case, show the effects when both goods are normal goods and when one good is  a normal goods and when one good is a normal and the other an inferior good.

b figure 1 below shows that tea live recently advertised buy three free 1 offer. if a consumer has  $100 to spend on tea live and other goods: and the average price of the other goods is $5 and the offer is valid for tea live that sells for $10. how does this deal impact the consumer's opportunity set? illustrate your answer using a completely labeled diagram

 

Transcribed Image Text:

tealive RUSH NOHOUR UNTIL 10PM BUY 3 FREE 1 tealive Figure 1 tealive RUSH NOHOUR UNTIL 10PM BUY 3 FREE 1 tealive Figure 1

Answer rating: 100% (QA)

Answer a The equilibrium consumption of two goods X and Y i Income doubled and prices tripled If bot... View the full answer