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Please solve the question When the price of good X decreases, Jane's substitution effect (in terms of good X) is enter your response here
Please solve the question "When the price of good X decreases, Jane's substitution effect (in terms of good X) is
enter your response here units of good X and her income effect is enter your response here
units of good X. (Enter numeric responses using integers.)
Each week, Jane selects the quantity of two goods, X and Y, that she will consume in order to maximize her utility. She spends her entire weekly income on these two goods. Suppose you are given the following information about the choices that Jane makes over a three-week period, where PX is the price of good X, PY is the price of good Y, and | is income: x Y Px PYI Week1 12 12 $2 $1 36 Week 2 18 18 $1 $1 36 Week 3 12 12 $1 $1 24 Using the line drawing tool, graph Jane's budget line for each week. Label these lines L1, L2, and L3. Carefully follow the instructions above, and only draw the required objects. 3.) Using the point drawing tool, indicate Jane's utility-maximizing bundle for each week. Label these points A, B, and C. Carefully follow the instructions above, and only draw the required objects. While analyzing Jane's pattern of consumption, you notice that she always consumes goods X and Y in the same proportion. 4.) Using the line drawing tool, draw an indifference curve that corresponds to the utility Jane receives in weeks 1 and 3. Label this curve U1. This curve should be comprised of2 line segments labeled U1 segment1 and U1 segment? Good Y 0 4 812'16 2'0 24 28 32 36 40 GoodX ,O) IE What can you say about Jane's preferences? Good X and good Y are perfect complements for Jane. Jane always consumes good X and good Y in xed proportions. Good X and good Y are perfect substitutes for Jane. Both A and B are correct. None of the above. Identify the income and substitution effects with respect to good X that result from a change in the price of good X. When the price of good X decreases, Jane's substitution effect (in terms of good X) is D units of good X and her income effect is D units of good X. (Enter numeric responses using integers.)Step by Step Solution
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