Suppose the consumers' total income is 100 TL. Please find the observations on the expenditures and prices of the goods (yearly average) you assigned. If your assigned good is, for example, foods and non-alcoholic beverage, you will use a space with foods and non-alcoholic beverage on the horizontal axis, and the sum of all other goods on the vertical axis (Please use an average of the prices of all other goods).

The goods assigned to you are food and non-alcoholic beverage. The assigned years are 2017, 2018 and 2019.

Below are the data you will use in the questions. Currency is the Turkish lira. (TL)

Distribution of household consumption expenditures by types of expenditure

(2017-2019)

(%) total consumption expenditure: 100,0 index

Foods and non-alcoholic beverage: 24,2

Alcoholic beverages, cigarette and tobacco: 4,0

Clothing and footwear: 6,0

Housing and rent: 21,5

Furniture, houses appliances and home care services: 7,1

Health: 1,9

Transportation: 17,7

Communication: 3,9

Entertainment and culture: 2,3

Educational services: 0,9

Restaurant and hotels: 5,7

Various good and services: 4,9

Consumer Price Index

Yearly average prices Foods and Non-Alcoholic Beverage

2017= 349,155

2018= 411,87

2019= 492,33

According to the data given above

a.For the assigned three years, please draw the revealed preferences diagram of the consumers for the good in your assigned regions by using three years observation you assigned. Can you tell anything about the welfare of the consumers? Are they better off or worse off in these years? (graph according to the explained preferences theory of consumers)

b.Please find the ratio of marginal utilities assuming that optimal choices made.

c.Please calculate the price elasticity of demand for two years.

d.Please find the demand equation for two years and draw them. (2017-2018 and 2018-2019)

resolve these questions.