Describe the state of affairs in the developing world concerning social overhead capital?
What will be an ideal response?
Developing countries are often burdened by inadequate social overhead capital, ranging from poor public health and sanitation facilities to inadequate roads, telephones, and court systems. Such social overhead capital is often expensive to provide, and many governments are not in a position to undertake many useful projects because they are too costly.
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The magnitude of the slope of the budget line is determined by
A) the marginal rate of substitution. B) the level of income. C) the consumer's preferences for the goods. D) relative prices.
Using the concept of income and substitution effects, explain how you might react to each of the following:
(a) You currently work 20 hours a week at $10 per hour and your employer tells you he must reduce your wage to $8 per hour. (b) The price of pizza doubles and the price of hamburgers remains constant.