Question
In the below figure, a consumer is initially in equilibrium at point C. The consumers income is $400, and the budget line through point C
In the below figure, a consumer is initially in equilibrium at point C. The consumers income is $400, and the budget line through point C is given by $400 = $100X + $200Y. When the consumer is given a $100 gift certificate that is good only at store X, she moves to a new equilibrium at point D.
a. Determine the prices of goods X and Y. Price of X: $ Price of Y: $ b. How many units of product Y could be purchased at point A? c. How many units of product X could be purchased at point E? d. How many units of product X could be purchased at point B? e. How many units of product X could be purchased at point F? f. Based on this consumers preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. (Click to select)
D, C, A, B
A, B, C, D
C, A, B, D
D, B, C, A g. Is product X a normal or an inferior good? (Click to select)
Normal
Inferior
Product Y Product XStep by Step Solution
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