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COURSE OF POLITICAL ECONOMY 1st YEAR ADDITIONAL EXERCISES

ANALYSIS OF CONSUMER BEHAVIOR
Question 1: In a travel brochure found the following proposal: The price per nig
ht of lodging is Fr 100Il is a reduction of 20% (across all nights) if there is
a minimum stay of 10 nights. Draw a budget constraint is compatible with this pr
icing structure. Question 2: If you buy 5 or fewer units of X, the price of X is
equal to 1fr. per unit. If you buy 5 or fewer units of Y, the price of Y is 1fr
. per unit. If you buy more than 5 units of X, the price of X is equal to 0.5 Br
per unit. If you buy more than 5 units of Y, the price of Y is equal to 0.5 Br
per unit. The individual's income is equal to 15 Br a) Build the budget constrai
nt. b) Draw the indifference curve of an individual who buys 3 units of X. Quest
ion 3: Draw the budget constraint - A consumer Fr.1000-income, with which he can
buy X or Y of the property or combinations of both. - The price of good Y is Py
= Br 2-unit. - If the consumer buys good X, the first units to 100 units cost-P
x = us.2 per unit. The quantities between 100 and 200 units per unit-cost Fr.1.
Any amount purchased above cost 200 Br 4 - per unit. Question 4: A consumer has
the choice between three options: - pay the normal price - buy a half fare that
costs .- Fr.300 purchase a subscription costs CHF general - 500.Si s income indi
vidual is R = Br 1000 - The price of good X (travel) is Fr.1-/Km and the price o
f good Y (other property) is Fr.1-/ unit, draw a curve indifference to a consume

Question 5: In the charts I and II below, you will find two utility curves (X an d Y are the variable quantities of two goods, Xo and Yo are given quantities of both goods). Build on a graph, based on these two curves, two points have the pr operty to be on the same indifference curve IUU (X, Y0) UU (X0, Y) II

5X5YQuestion 6: On the vertical axis is the quantity of consumer goods. The horizont
al axis is the number of hours worked per week) Draw in the graph below that wil
l take the general form of indifference curves in this space Goods
Hours of work b) Is a wage increase always leads to an increase in hours of work
that maximize utility?
Question 7: A consumer maximizes utility at point A. If the property costs Fr.10

-/unité Y, what is the price of good X?
y 12
10

6A4
1 1 4 6 10 12 x

Fr.5-/unité Fr.20-/unité Fr.100-/unité Fr 1-/unité Question 8: A consumer has tw o goods, consumption (C, measured in units) and leisure (L, measured in hours da y). His utility function is U = L * C The price of consumer goods is Fr.1-/unité . The day has only 24 hours. a) How many hours working this individual if the sa lary is Fr.10-/heure? b) How does it work if the wage is Fr.20-/heure? c) Discus s your answer using a graph Question 9: The price of good X is Px = Fr.4-/unité.

The price of good Y is Py = 2-/unité Fr. A consumer spends one third (1 / 3) of its income for the property X. Draw the path of expansion. Question 10: A consu mer can buy two properties. The price of good Y is Py = Br 1-/unité. The price o f good X is Px = Fr.1/unité. For income between 200 and Br-Fr.100 - well there i s a luxury good. For income between CHF 300 Fr.200et - well there is a normal go od. For income above CHF 300 - well there is an inferior good. - Draw the path o f expansion. - Draw the Engel curve for good Y Question 11: Consumer expenditure , whatever the level of income, 50% of its income on good X and 50% for good Y. Draw the path of expansion in the knowledge that X costs Fr.5-/Kg

Y costs Fr.20-/kg Question 12: The income elasticity of good X is initially less than 1, then equal to 1, then over a 1.Dessinez Engel curve corresponding. Indi cate where the income elasticity is equal to 1. X

M Question 13: If the consumer has an income of R1, it consumes at point A. We k now that the price elasticity of x is equal to 0. What can we say about the quan tity consumed of good X, if the consumer's income goes to R2?

yA CI0 R1 x
Question 14: Let Px = Py = 1-/unité Fr. Draw on the graph II the Engel curve for
good Y which corresponds to the Engel curve of good X on the graph IIXY

40
II
40
30
30
20
20
10
10
October 20 0 30 40
0M10

20
30
40
MQuestion 15: Draw three indifference curves in the graph on the left are consist

ent with the Engel curve for good X in the graph.
YXR1

R2
R0 R1 R2 R3 X R3
XQuestion 16: Draw the graph of indifference curves II and an expansion path that

match the Engel curve in Figure I. I II
YYR0 R0 R1 R2 R
R1
R2 X

Question 17: Suppose that wages are indexed. Consumers with low incomes are they preterites if the price index for consumption has a greater weight of luxury go ods? Question 18: Calculate the elasticity of the demand P = 10-2X for a price o f P = 2 Question 19: Let the demand function P = 15-5X.A how the elasticity of d emand is it equal -2? Question 20: The request is 1000-0.5X. Calculate the arc e lasticity between the price P = P = 800 and 700. Calculate the point elasticity for the price P = 700. Question 21: Applications of two consumer goods are D1 an d D2 respectively (Applications are straight and are parallel). On demand D1, at point E, price elasticity is-1.5.Sur how D2 is the demand there be the same ela sticity? Explain! P

ED2 D1 X

Question 22: A consumer can consume the goods x, y and z. x and y are strictly c omplementary assets. The price elasticity of goods x and y is necessarily E = 1 E = the same for both goods E <1 for both goods E> 1 for both properties E = unl imited. Question 23: The price of cigarettes increased from 3 Fr - Fr Package 5 - Package. A consumer spends CHF 90 - per month to its cigarettes at a price of CHF 3 - Package. How much does it cost after the price increase? more than CHF 9 0 per 90moins Fr answer requires knowledge of the elasticity must be known to me et the income elasticity to respond must know the price elasticity response is n ot correct Question 24: The request is X = 20-P. For what range of price elastic ity point is it bigger than a (E> 1)? Question 25: The individual B has an incom e that is twice as large as that of the individual A. When Px = 2 XA XB = 10 = 3 0 When Px = 4 XA XB = 5 = 15. Is that the elasticity of demand relative to price (in absolute terms) is greater for the individual A and B for the individual? Q uestion 26: Individual applications are as follows: D1: P = 10 - (1 / 2) X D2: P = 15 - (1 / 4) X D3: P = 30 - (1 / 4) X What is the price elasticity of aggrega te demand for a price P = 5? Question 27: An economy is composed of 10 individua ls of type A and type B individuals 20 The demand for good X is: xi = 5 - (1 / 2 ) P i = 1,2, ... 10, xi> 0 individuals of type A and xj = 5 - (1 / 4) P j = 1,2,

... .20, xj> 0 for individuals of type B. Calculate the total demand. Question
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