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Q. Suppose you consume nothing but goods X and Y. We have two years? of data regarding your consumption and income:Year 1:
I = $10 per week; PX = $1 per unit; PY = $1 per unit.
Your consumption: X = 6 units; Y = 4 units.
Year 2:
I = $20 per week; PX = $2.50 per unit; PY = $1.25 per unit.
(a) In which year are you happier? Show your result on a graph using indifference curves.
(b) In which year do you consume more Y? This should be obvious from your graph in (a), assuming your graph is correct.
a smaller multiplier means that change in government purchases of goods and services, government transfers, or taxes necessary to close an inflationary or recessionary gap is larger. How can you explain this apparent inconsistency.
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q1. from the price elasticity calculated above we can say that if the price of x increases by 10 then its demand will
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Explain how labor market equilibrium is affected by the supply also demand of labor.
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