Economics



Item Name

In the case of the gasoline tax, what would happen if the rebate to the consumers were based on their original consumption of gasoline, x, rather than on their final consumption of gasoline, x’?

Suppose a consumer has preferences between two goods that are perfect substitutes. Can you change prices in such a way that the entire demand response is due to the income effect?

Suppose that preferences are concave. Is it still the case that the substitution effect is negative?

. If a consumer’s net demands are (5, −3) and her endowment is (4, 4), what are her gross demands?

If leisure is an inferior good, what can you say about the slope of the labor supply curve?

Suppose that by some miracle the number of hours in the day increased from 24 to 30 hours (with luck this would happen shortly before exam week). How would this affect the budget constraint?

The prices are (p1, p2) = (2, 3), and the consumer is currently consuming (x1, x2) = (4, 4). Now the prices change to (q1, q2) = (2, 4). Could the consumer be better off under these new prices?

The prices are (p1, p2) = (2, 3), and the consumer is currently consuming (x1, x2) = (4, 4). There is a perfect market for the two goods in which they can be bought and sold costlessly. Will the consumer necessarily prefer consuming the bundle (y1, y2) = (3, 5)? Will she necessarily prefer having the bundle (y1, y2)?

The U.S. currently imports about half of the petroleum that it uses. The rest of its needs are met by domestic production. Could the price of oil rise so much that the U.S. would be made better off?

A consumer, who is initially a lender, remains a lender even after a decline in interest rates. Is this consumer better off or worse off after the change in interest rates? If the consumer becomes a borrower after the change is he better off or worse off?