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
Is there a trade-off between inflation and unemployment? The Keynesian side posits that policies can indeed be used to stimulate demand - demand-side policies - and those mar

(a) Describe the different types of inflation in a country. (b) Describe the trade-off between inflation and unemployment, using appropriate diagrams. (c) Mauritius has bee

Fiat money is not a new idea.  Some European historians recognize the first use of fiat money in Europe resulting from gold and silver smiths issuing their customers receipts for g

can you help me figure out how to create a graph with little or no information

what is the theory of second best? prove the theorem with the help of a diagram.

Area of Dominant Influence (ADI) The ADI is a geographic area made up of all over the world that receive signals from radio and television stations in a individual market.

how might opportunity cost help to explain the pattern of international trade?

Assume that you have a client that is a paper manufacturer and they have expressed concern that the government will pass a new regulation banning the use of chlorine based technolo

1.  National Marine Fisheries Service is considering closing a large area of federal waters to fishing in Alaska due to negative interactions of fishing with endangered Steller sea