Derive a demand function, Microeconomics

Zac consumes only pizza and chianti. He consumes these goods in fixed proportions: 2 slices of pizza for one glass of chianti. His income is $100 per week.

a. Derive demand functions forpizza and chianti. Are the goods normal or inferior, substitutes or complements?

b. If pizza costs $1 per slice and chianti $3 per glass, how much of each good will he consume?

c. If the price of pizza falls to $0.5 per slice and, chianti stays at $3 per glass, how much of each good will Zac consume?

d. Using a suitably labelled diagram with pizza on the horizontal axis, illustrate the impact of the change in price of pizza from $1 to $0.5 per slice. Show the level of utility before and after the price change and show the decomposition line.

Posted Date: 3/30/2013 6:14:55 AM | Location : United States







Related Discussions:- Derive a demand function, Assignment Help, Ask Question on Derive a demand function, Get Answer, Expert's Help, Derive a demand function Discussions

Write discussion on Derive a demand function
Your posts are moderated
Related Questions
What are the possibilities of returns to scale in production technology? Three possibilities are there as: technology exhibits (a) constant returns to scale; (b) decreasing ret

explain the central problem of economy with production possibility curve?

is it just assumed that a monopoly graph is showing economic profit instead of accounting profit

advantage dis advantage of pure monopoly

Market-Friendly Reforms: One main shortcoming of present development cooperation is that recipients of development cooperation is that recipients of development finance are d


(a) What  are the problems associated with R 2 and how can adjusted R 2 solve them? (b) If the regressors  in an equation are highly correlated, which measures can be used to

Should the bank not have anyone to lend the demand deposit to (like that will ever happen) would the size of the money multiplier decrease? If so, why?

Consider an upstream firm in Russia that mines iron ore at a total cost of $15 q , where q is the number of tons of ore. This upstream firm then ships ore to Germany for processi

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4