Nama : Astarina Diani Putri

Kelas : C
NIM : 486997

A consumer must divide $600 between the consumption of product X and product Y.
The relevant market prices are Px = $10 and Py = $40. (LO2)
a. Write the equation for the consumer’s budget line
i Px
Budget Line (Y) = –( ¿X
Py Py
600 10
= –( ¿X
40 40
1
= 15 - X
4
= 15 – 0,25X
b. Illustrate the consumer’s opportunity set in a carefully labeled diagram.
M 600
= = 60
Px 0 10

M 600
= = 15
Py 40

c. Show how the consumer’s opportunity set changes when the price of good X
increases to $20. How does this change alter the market rate of substitution between
goods X and Y?
M 600 M 600
= = 30 = = 15
Px 1 20 Py 40
Market Rate of Substitution:
−Px −20
=
Py 40
−1
=
2
−1
2
 i Px 1
Budget Line (Y) = –( ¿X
Py Py
600 20
= –( ¿X
40 40
1
= 15 - X
2
= 15 – 0,5X
Provide an intuitive explanation for why a “buy one, get one free” deal is not the same
as a “half-price” sale. (LO6)
“Buy one, get one free” tidak sama dengan “half-price” dikarenakan pada saat keadaan
barang “buy one, get one free”, bisa jadi sedang terjadi surplus pada barang, namun pada
“half-price” yang meningkat adalah demand, dimana pada barang diskon akan lebih banyak
peminat.

In the following figure, a consumer is initially in equilibrium at point C. The

consumer’s income is $400, and the budget line through point C is given by $400 =
$100X + $200Y. When the consumer is given a $100 gift certificate that is good only at
store X, she moves to a new equilibrium at point D. (LO1, LO3, LO6)
a. Determine the prices of goods X and Y
M = PxX + PyY
400 = 100X + 200Y
X = 100
Y = 200
b. How many units of product Y could be purchased at point A?
M = PxX + PyY
400 = 0 + 200Y
200Y = 400
Y = 2 units
c. How many units of product X could be purchased at point E?
M = PxX + PyY
400 = 100X + 0
100X = 400
X = 4 units
d. How many units of product X could be purchased at point B?
 Given gift certificate for good X
M = PxX + PyY
400 + 100 = 100X + 200Y
500 = 100X + 200(2)
500 = 100X + 400
500 – 400 = 100X
100X = 100
X = 1 unit
e. How many units of product X could be purchased at point F?
M +100 400+100
= = 5 units
Px 100
f. Based on this consumer’s preferences, rank bundles A, B, C, and D in order from
most preferred to least preferred.
D-B-C-A
Karena D berada pada titik equilibrium yang mana juga memiliki gift certificate,
sehingga pada titik D mampu mencapai minat tertinggi baik untuk barang Y dan X.
Setelah itu berlanjut ke titik B, karenatitik B juga memiliki gift certificate yang mana
mampu meningkatkan minat. Kemudian ke titik C, yang sebelumnya adalah titik
equilibrium pertama, setelah itu dilanjut ke titik A karena pada titik A mampu memiliki
barang Y namun tidak memilik barang X.
g. Is product X a normal or an inferior good?
Barang X adalah baranf normal. Karena perubahan harga yang terjadi pada barang X
tidak mempengaruhi dengan kurva pada barang Y.