Assume that a consumer faces the budget constraints shown.
a. Assuming that income is the same on both occasions, describe the difference in relative prices between panel a and panel b.
b. If income in panel b is 240, what is the price of good X?
c. If income in panel a is 120, what is the price of good Y?
d. Estimate the relative price of good Y in panel a and panel b.

Question

Assume that a consumer faces the budget constraints shown.
  a. Assuming that income is the same on both occasions, describe the difference in relative prices between panel a and panel b.
b. If income in panel b is 240, what is the price of good X?
c. If income in panel a is 120, what is the price of good Y?
d. Estimate the relative price of good Y in panel a and panel b.

Quizplus · Accepted Answer

The Answer of Assume that a consumer faces the budget constraints shown.
  a. Assuming that income is the same on both occasions, describe the difference in relative prices between panel a and panel b.
b. If income in panel b is 240, what is the price of good X?
c. If income in panel a is 120, what is the price of good Y?
d. Estimate the relative price of good Y in panel a and panel b.

Assume That a Consumer Faces the Budget Constraints Shown