MGEB02H3 Study Guide - Final Guide: Composite Good, Demand Curve, Indifference Curve
4 Apr 2021
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Question-1 [33 points] answer the following short questions: [4 point] since inception in 2009 the price of bitcoin (digital currency) has increased from few pennies to around . Using the following graph, identify possible shifts in demand and/or supply that can lead to this change. It is mainly the demand (and very inelastic supply) that has caused the price to increase: [5 points] manju is currently consuming at point a. Suppose the price of hotdog has increased and that manju views hotdog as a giffen good. Graph her hypothetical final bundle and show the substitution and income effects. Page 2 of 13: [6 points] graph the indifference map for the following individuals, lily likes berry whether blackberry or blueberry does not make a difference. This is an example of perfect substitute where the rate of substitution is one: Blueberry: david likes tea but he knows his limit, he does not drink more than 4 cups a day.
