ECON 301 CSUSM Optimal Consumption Bundle & Total Price Effect Problem

Question Description

I’m working on a economics question and need an explanation to help me study.

Note: For this question you are required to draw well-labeled graphs. Please make surethat the graph is large in size so that all the details can be easily noted.Suppose a typical consumer is trying to decide on her optimal consumption bundle bysolving a constrained optimization problem. The utility function is U = U (x, y), and theprice per unit of x and y are Px and Py, respectively. The allowance of the consumer isdenoted by M.In each of the subsequent cases, the price of x is going to change, and you will be requiredto draw graphs for each of these cases to show the magnitude of the substitution effect,the income effect and finally the total price effect. For all the graphs, plot good x on thehorizontal axis.Case a: The price of x increases and assume that the good x is a normal good.Case b: The price of x increases and assume that the good x is an inferior good.Case c: The price of x decreases and assume that the good x is a Giffen good. A Giffengood is an inferior good, but for a Giffen good the magnitude of the income effect is largerthan the magnitude of the substitution effect.Case d: The price of x decreases and assume that the good x is a normal good.

Our Service Charter

1. Professional & Expert Writers: Executive Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Executive Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Executive Papers is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Executive Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.