MICRO ECONOMICS

Chapter 2 A1. If the price of good 1 (plotted on the Xaxis) triples and the price of good 2 doubles, does the budget line become atter or steeper? Illustrate With the aid of a sketch. [4] A2. If the income of the consumer increases and one of the prices decreases at the same time, Will the consumer necessarily be at least as welloff? [2] Chapter 3 Bl. If we observe a consumer choosing (x1, x2) When (yl, yz) is available one time, are we justied in concluding that (x1, x2) >- (yl, yz)? [3] B2. If good 1 (plotted on the Xaxis) is a \"neutral,\" What is its marginal rate of substitution for good 2? Illustrate With the aid of a sketch. [3]