Question: my roll no 2 5. Answer the following question. (4) a. How do consumers decide what to buy? b. If income elasticity of demand is

my roll no 2 5. Answer the following question. (4) a.

my roll no 2

5. Answer the following question. (4) a. How do consumers decide what to buy? b. If income elasticity of demand is negative your rout number then what kind of good is that. c. If cross price elasticity is positive 5 your roll number then what kind of good is that. d. Give real life example of perfect elastic supply, elastic demand, perfect inelastic demand. 6. Sarah buys only chicken and t-shirt. In 2019, Sarah earns Rs. 80000, chicken costs Rs. (your roll number) per kg, and T-shirt cost Rs. (your friend roll number). Draw Sarah's budget constraint. Now suppose that all prices increase by 10 percent in 2020 and that Sarah's salary increases by 10 percent as well. Draw Sarah's new budget constraint. Also draw indifference curve for this case and show what does MRS tells us about it. (4)

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