Say a consumer is choosing between wine and cheese. The price of wine is 10 and the price of cheese is 5. If the marginal rate of substitution is 4, and if wine is on the horizontal axis and cheese is on the vertical axis then the consumer is purchasing
A. too much wine.
B. purchasing more than what her income would allow.
C. just the right amount of both goods.
D. too much cheese.
Answer: D
Economics
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Refer to the above figure. The figure represents the consumption function for a consumer. Point A represents
A) positive saving. B) negative consumption. C) autonomous consumption. D) zero saving.
Economics
Suppose the production function for a certain device is q = L + K. If a labor-saving technical change has occurred, which of the following could be the new production function?
A) q = L + 5K B) q = 5 ? (L + K) C) q = 5L + K D) All of the above are possible.
Economics