Question: please solve the question below: QUESTION 1 a. Explain (in words, without using diagram) what would happen to the equilibrium consumption of two goods, X

please solve the question below:

please solve the question below: QUESTION 1 a. Explain (in words, without

QUESTION 1 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 good and the other an inferior good. b. Figure 1 below shows that Tealive recently advertised \"Buy three, free 1\" offer. If a consumer has $100 to spend on Tealive and other goods; and the average price of the other goods is $5 and the offer is valid for Tealive that sells for $10, how does this deal impact the consumer's opportunity set? Illustrate your answer using a completely labelled diagram

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!