Blog

Consider the market for housing. Suppose that after a decrease in consumer’s income, the price of houses fell while the quantity of houses remained the same. Which of the following is a possible explanation for why this happened?

A new health report shows that eating too many bagels may increase cholesterol levels since bagels are considered a high carbohydrate and a high fat food.  

Which of the statements below about the income elasticity of demand are true? For normal goods, income elasticity is positive. For inferior goods, income elasticity is negative. When income elasticity for a good is greater than one, the share of income spent on the good is higher with higher income.

University of Minnesota students love grabbing a bagel on their way to ECON 1101 class and the number of students first-year students attending UMN has increased this year. 

Producing a quantity lower than the equilibrium of supply and demand is inefficient because consumers’ willingness to pay for the last unit is _____________________. (Fill in the blank.)

Sonya consumes soda and fish nuggets. In the graph below, you can find the graphical representation of Sonya’s indifference curves as well as three different budget constraints. It is your job to identify which budget constraint(s) to use in each question. Use this information to answer questions 35 – 38.

The indifference curves above show us that Alya’s indifferent between having (4 tacos, 2 nachos) and

Suppose that Alya’s income increases to $32, while the prices of nachos and tacos remain unchanged. Relative to the initial optimal consumption bundle, what is the change in Alya’s quantity demanded for tacos associated with the increase in income?

Suppose that the price of one taco falls from $8 to $2 and that both Alya’s income and the price of one nacho remain unchanged at $16 and $2, respectively. What happens to Alya’s quantity demanded for tacos as a result of the decrease in the price of tacos?

Who has an absolute advantage in producing Coffee? Who has an absolute advantage in producing Chocolate Shakes?