gure 1: Product Y 45 40 35 30 B 25 20 15 10 5 0 20 Product Please refer to Figure 1. A consumer is in equilibrium at point A. The price of good X is What is the price of good Y? (Please do not include a dollar sign in your answer) 10
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A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5. a. What is the price of good Y? b. What is the consumer's income? c. At point A, how many units of good X does the consumer purchase? d. Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? e. Is the consumer better off or worse off as a result of the price change?
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Figure 1.58 shows supply and demand for a product. (a) What is the equilibrium price for this product? At this price, what quantity is produced? (b) Choose a price above the equilibrium price-for example, $p=12 .$ At this price, how many items are suppliers willing to produce? How many items do consumers want to buy? Use your answers to these questions to explain why, if prices are above the equilibrium price, the market tends to push prices lower (toward the equilibrium). (c) Now choose a price below the equilibrium price for example, $p=8 .$ At this price, how many items are suppliers willing to produce? How many items do consumers want to buy? Use your answers to these questions to explain why, if prices are below the equilibrium price, the market tends to push prices higher (toward the equilibrium). (GRAPH CANNOT COPY)
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