One of the following is not truc about the characteristics of well-behavedindifference curves:A. They are convex to the originB. All points on an indifference curve vield the same level of satisfactionC. They are straight lineD. As we move closer to the origin, the level of satisfaction will diminishE. None5.When the short run average product of labor is declining but positive, themarginal product of labor is,C. ZeroD. Any of the above is possibleA. NegativeB. Declining6.When marginal utility is positive and declining,A. Total utility decreases at a diminishing rateB. Total utility increases at a diminishing rateC. Total utility increases at an increasing rateD. Total utility is negative7.If the price elasticity of demand is less than 1 and price increases by 8%,then, quantity demand will,C. Increase by more than 8%A. Decrease by less than 8%D. Remains the sameB. Decrease by more than 8%8.refers to attitude of an individual who prefers risk income than income withcertain outcome.A. Risk AverseB. Risk loverC. Risk neutralD. Diversification9.The law of scarcity refers to the following facts:A. Scarcity exist only during bad economic timesB. Scarcity exists only when there is povertyC. Even in the richest countries, hungry people can be foundD. No country can produce enough to satisfy fully every body's wants foreverything.10.From the following one is wrong.A. Consumer's taste can be a determined factors for shift of demandB. Consumer's income can be a determinant factor for the shift of demandWorksheet for Microeconomics I (Econ 241)

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4. One of the following is not true about the characteristics of well-behaved indifference curves: A. They are convex to the origin B. All points on an indifference curve vield the same level of satisfaction C. They are straight line D. As we move closer to the origin, the level of satisfaction will diminish E. None of lahor is declining but positive, the duct

4. One of the following is not true about the characteristics of well-behaved indifference curves: A. They are convex to the origin B. All points on an indifference curve vield the same level of satisfaction C. They are straight line D. As we move closer to the origin, the level of satisfaction will diminish E. None of lahor is declining but positive, the duct

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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If the economy uses inputs efficiently, then (pls select all that applies) Group of answer choices a) MRTS = 1. b) MRTS must be equal to the slope of a firm’s isoquant curve. c) the ratio of input marginal products must be equal to the ratio of input prices. d) the quantity of one output cannot be increased without decreasing the quantity of the other. e) every firm’s MRTS is equal to every consumer’s MRS. f) every firm’s MRTS is equal to the ratio of input prices. g) MRTS = MRT. h) outputs are on PP
Compare the two concepts: Marginal Rate of Substitution (MRS) and the Marginal Rate of Technical Substitution (MRTS). 1. Clarify how to use the concepts in maximizing problems. Explain the similarities of the two concepts. 2. Use two illustrations- by explaining convex indifference curves and isoquants and a formal approach to clarify your explanations.
1. Supose that·Total Factor Productivity increases·Capital depreciates by 10%Everything else equal, what happens to labor demand in the economy?A. It decreases (i.e. shifts to the left of the demand curve)B. It increases (i.e. shifts to the right of the demand curve)C. Not enough information to answer 2. Does an increase in the wage causes leisure always to increase, because leisure is a normal good?A. YesB. NoC. Only if the substitution effect dominates the income effectD. Only if the income effect dominates the substitution effect
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Consider a representative agent with the utility function U = ln(Ct)+ Nt The budget constraint is Ct = wtNt +Dt where wt is the wage and Dt is non-wage income (i.e. a dividend from ownership in the firm). The agent lives for only one period (period t), and hence its problem is static. (a) Derive an optimality condition characterizing optimal household behav- ior. (b) Solve for the optimal quantities of consumption and labor. Plz do fast asap, urgent.
Explain how the wage can adjust to balance thesupply and demand for labor while simultaneouslyequaling the value of the marginal product oflabor.
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The lines on the graph are budget constraints, showing the tradeoff between labor and leisure. Suppose that when the wage changes, an individual chooses to move from point A to another point on the graph. For each of the other points, where would it belong on the backward bending labor supply curve? Backward‑bendingportionVerticalportionUpward‑slopingportion Answer Bank B D F C E
Constrained Optimization: Cobb-Douglas Production Function:1. Based from the factor shares of the two inputs, what will happen to the number of output if it the firm decides to triple both the amount of labor and capital?2. State the optimization problem of the firm.3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product ofCapital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combinationof K and L that the firm should use to produce the maximum possible output. Do not solvethe problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces?
Follow-up questions. d. Let D be the difference in marginal product between an experienced worker and a new worker (MPe − MPn). Suppose that robust, experienced workers would prefer not to pool with sickly workers at their firm, and so they seek out a new job with an employer who does not offer health insurance. What will be the wage of the robust worker at the new job during the first year there? Keep in mind, these workers will no longer be experienced because they will be adapting to a new firm. Under what conditions will it make financial sense for the robust worker to change jobs? Your answer should be an inequality that includes D, θ, Vr, and Vs. e. D is a measure of job-specific human capital; as workers learn the job, they become more productive so D > 0. However, not every job or industry has the same value for D. In some lines of work D is low, while in others D is high, simply because of the nature of the work. Given the results, you have seen in this problem, in which…
a. Give as many reasons as you can why we believe that indifference curves are convex to the origin. b. If the budget line is Y=500=pBB+pZZ=5B+10Z, what is the marginal rate of transformation, MRT, between B (burritos) and Z (pizza)?
Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 200) * (L - 80) This utility function implies that Shelly’s marginal utility of leisure is C - 200 and her marginal utility of consumption is L - 80. There are 168 hours in the week available to split between work and leisure. Shelly earns $5 per hour after taxes. She also receives $320 worth of welfare benefits each week regardless of how much she works. a. Graph Shelly’s budget line. b. What is Shelly’s marginal rate of substitution when L = 100 and she is on her budget line? c. What is Shelly’s reservation wage? d. Find Shelly’s optimal amount of consumption and leisure.