Short Answer 1-11:

Short Answer: 1. How is the substitution effect related to the Law of Demand? 2. Joe works 10 hours per day and earns a wage of $151hour. He recently won $10,000 in the state lottery. If leisure is a normal good for Joe. does he work more or less than 10 hourslday? 3. Reggie consumes 15 cups of coffee per week at a price of $2.50. When the price increases to $3, Reggie only consumes 10 cups of coffee per week. If the substitution effect is 2, what is the income effect of the price increase? 4. The price of qz has increased. Given the gure below, what is the compensating variation? Assume income is Y = $100