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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)
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 P=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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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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