suppose at her current level of consumption, a person enjoys eating fruit three times as much as eating yogurt. the price of a serving of fruit is $2 and the price of a yogurt is $1. assume she is spending all of her income on these two goods. is the person spending her income (for these two goods) in a manner that maximizes her utrity?

Answers

Answer 1

No, the person should increase fruit consumption but decrease yogurt's consumption.

What does income effect mean?

The income effect is a change in an individual's or economy's income and how that change affects quantity demanded. For example, John Doe needs more product after a pay raise because he has more disposable income.

How do you know if the income effect is positive or negative?

Common goods and services usually have a positive income effect. As income increases, so does demand. And when income falls, demand falls. If demand decreases as income increases, the good or service is likely to be inferior and is said to have a negative income effect.

What are the sources of income?

Salary income, Interest income, Dividend income, Profit income, Income from capital gains, rental income, Income from royalties.

To learn more about income effect visit:

https://brainly.com/question/19756690

#SPJ4

Related Questions

Fill in the missing values in the following table, selecting the answers closest to the values you calculate.
Year
Quantity of Money
Velocity of Money
Price Level
Quantity of Output
Nominal GDP
(Dollars)
(Dollars)
(Cell phones)
(Dollars)
2017 200 ??
5.00 400 ?
2018 202 10 ?? 400 ??
The money supply grew at a rate of (.5%, 1%, 1.25%, 101%) from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of money (increased, decreased, remained the same), the change in the money supply was reflected (partially, entirely) in changes in the price level. The inflation rate from 2017 to 2018 was (.5%,1%,1.25%,101%).

Answers

The velocity of money in 2017 is 10.

The nominal GDP in 2017 is $2000.

The price level in 2018 is $5.05.

The nominal GDP is $2020.

The money supply grew at a rate of 1% from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of money remained the same, the change in the money supply was reflected entirely in changes in the price level. The inflation rate from 2017 to 2018 was 1%.

What is the nominal GDP and the velocity of money?

Nominal GDP is the total value of goods and services produced by a country using current year prices. Nominal GDP is the product of the price level and the quantity of output.

Nominal GDP = price x quantity of output

Nominal GDP in 2017 = $5 x 400 = $2000

Velocity measures how fast money changes hands in the economy. According to the quantity theory of money, the product of velocity and the quantity of money is equal to nominal GDP.

Velocity x quantity of money = price level x quantity of output

Velocity x quantity of money = nominal GDP

Velocity = nominal GDP / quantity of money

Velocity in 2017 = $2000 / $200 = 10

Changes in price levels is used to measure the rate of inflation in the economy.

Price level = (Velocity x quantity of money) / quantity of output

Price level in 2018 = (202 x 10) / 400 = 5.05

Nominal GDP in 2018 = 5.05 x 400 = 2020

Inflation rate increase from 2017 to 2018 = (price level in 2018 / price level in 2017) - 1

Inflation rate increase from 2017 to 2018 = (5.05 / 5) - 1 = 0.01 = 1%

Increase in money supply from 2017 to 2018 = (quantity of money in 2018 / quantity of money in 2017) - 1

Increase in money supply from 2017 to 2018 = (202 / 200) - 1 = 0.01 = 1%

To learn more about the quantity theory of money, please check: https://brainly.com/question/26370040

#SPJ1

Other Questions

the number of women incarcerated in prisons has begun to slowly decline over the past few decades. true false Which expressions are equivalent to 20 divided by 1 plus 4 The founder effect is an example of _______. Write an equation of the line that passes through the points.4.(-3,0), (-2, 3)5. (-6, 10), (6, -10) market structures for each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. select the matching entry for each dropdown box in the following table. scenario number of firms type of product market model in a major metropolitan area, there are many coffee shops, but one chain has gained a large market share because customers feel its coffee tastes better than its competitors'. there are dozens of pasta producers that sell pasta to hundreds of italian restaurants nationwide. the restaurant owners buy from the cheapest pasta producer they can. while pasta manufacturers must pay licensing fees to their local government and undergo regular food-safety inspections, anyone who has passed inspections can acquire and maintain their license. many identical perfect competition in a small town, there are four providers of broadband internet access: a cable company, the phone company, and two satellite companies. the internet access offered by all four providers is of the same speed. almost everyone in the city already has broadband, so any potential new company would have to engage in a price war with the existing companies and would be unlikely to cover its costs for years, if ever. the government has granted the u.s. postal service the exclusive right to deliver mail. 8. the internet does not currently offer any resource reservation or quality of service management facilities. how do the existing internet-based audio and video streaming applications achieve acceptable quality? what limitations do the solutions they adopt place on multimedia applications? As the replenishment lot size grows, the cycle inventory at the firm grows, thus increasing the cost of holding inventory. TRUE. One reason it is important to include a in a personal statement is that it gives the writer a chance to reflect on the experiences discussed in the narrative.a. conclusionb. introductionc. toned. topic The threat, use, or conspiracy to use _____ within the United States or against an American citizen abroad is punishable under federal law. zoe, aged twenty-two, gave birth to her first child, alexa, four days ago. zoe's initial complaints included insomnia, restlessness, and emotional labiality which progressed to confusion, irritability, delusions, and thoughts of wanting to kill her baby. which diagnosis would you consider first? Find the y intercept y = 17 x + 12. You want to know which files are large files (at least 0.1MB) in your data directory, but you do not want to go through them one by one. So you decide to design a regular expression to help with this. Locate the rule under the p1 target in your Makefile. This rule uses the Is command to list the contents of the data directory in your current folder. The -I option produces the long listing for these contents, which includes their size in bytes. The output of this is command is then piped as input into grep command. The-E option for the grep command allows searching through this text with a regular expression. Replace the regular expression in this grep command to search for any 6 digit number. Since the size of these files are displayed in bytes, the smallest possible six digit number: 100000 corresponds to 0.1MB. When this regular expression is correct, running "make p1" should display the three large files that can be found within the provided data directory. Tip: Start by composing a regex that matches any single digit, and test this to make sure that it works as expected. If you encounter trouble with one specific way of matching single digits, like \d, then please try to find another way that works with grep - E. Once this is working, look for a way to extend this pattern so that it must be repeated exactly six times to be matched. If country A can produce both goods X and Y more efficiently, that is, with smaller absolute amounts of resources, than can country B:A.then there is no possible basis for mutually advantageous specialization and trade between A and B.B.we can conclude that A is an industrially advanced economy and B is a developing economy.C.mutually advantageous specialization and trade between A and B may still be possible.D.it will necessarily be advantageous for B to import both X and Y from A. True or False? A true market segment meets all of the following criteria:it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs),it responds similarly to a market stimulus, and it can be reached by a market intervention landings at the top and bottom of stairs should be at least equal in length to the of the stairway. A professor wanted to know what proportion of college students believe in ghosts. She polled 200 students and found that 58% said they believe in ghosts. Create a 99% confidence interval for the true proportion of college students believing in ghosts. a. (0.5116, 0.64840 b. (0.2074, 0.3727) c. (0.4901, 0.6699) d. (0.2271,0.3529) read the picture plsss x^4-2x^2-16x-15=0 find the zeros with work please Write the coordinates of the vertices after a reflection over the line y=-5. Before accepting any opinion on any issue as "the truth" you should look for evidence that ____