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IN January MR.Z HAD 100$ TO SPEND .THE cost OF A WAS 1$, WHILE COST of B $2. MR. Z BOUGHT 30 B AND 40 A...IN February MR.Z HAD AGAIN 100$ TO SPEND. Good B STILL COST 2$ AND A COST 1.25$.MR. Z CONSUME 30 OF B and 32 of A.
Q 1) the substitution effect of this price change would make him buy (less,more,same amount )of A .... And (less, more, same amount) of B. how it will be solved??
Q 2) since it is true and the total change in his B 's consumption was zero, it must be that the income effect of this price change on his consumption of B makes him buy (less,more,same amount ) of B.how to solve
 one year ago
 one year ago
IN January MR.Z HAD 100$ TO SPEND .THE cost OF A WAS 1$, WHILE COST of B $2. MR. Z BOUGHT 30 B AND 40 A...IN February MR.Z HAD AGAIN 100$ TO SPEND. Good B STILL COST 2$ AND A COST 1.25$.MR. Z CONSUME 30 OF B and 32 of A. Q 1) the substitution effect of this price change would make him buy (less,more,same amount )of A .... And (less, more, same amount) of B. how it will be solved?? Q 2) since it is true and the total change in his B 's consumption was zero, it must be that the income effect of this price change on his consumption of B makes him buy (less,more,same amount ) of B.how to solve
 one year ago
 one year ago

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shivamamityBest ResponseYou've already chosen the best response.0
plz ans this question........any one plz help
 one year ago

FlyingChineseBoyBest ResponseYou've already chosen the best response.0
Q1 less and more The price rise of A will shift rightward the demand curve of B. So quantity demanded of B should be increased given the same price of B. dw:1364917000856:dw Because A has substitute good B. So generally, A's is price elastic. That means when A's price goes up, total spending on A will decrease. So quantity demanded of A will decrease given A's price goes up. dw:1364917295941:dw Q2 less Income effect should make him choose the opposite to keep the consumption of B to keep unchanged.
 one year ago

keshav.rana.1992Best ResponseYou've already chosen the best response.0
what i think is q1 less and same as ....demand of B is a vertical line ....i.e whether there is a price change....there is no change is it's demand..... and for A it has downward sloping ...
 one year ago
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