QUESTION 19Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices double) with a fixed monetary income is equivalent to a decrease ofmonetary income by a factor T (so that the new income is Tm), keeping both prices fixed at their original levelO a. T=0.2O b. T=0.1OC. T=0.25O d. T=0.9O e. T=0.5QUESTION 20A firm produces a commodity using Capital (K) and Labor (L). K and L are perfect complements in production. Given current input prices, the firm employs 50 units of Land 50 units of K to produce 2500 units of output. Due to stronger Unions, wages increase by 20%. The firm, however, keeps producing the same level of output afterthe increase in wages. The new input mix after the increase in wages will be such that:O a. Not enough information to answerO b. Both K and L decreaseO. Both K and L remain unchangedO d. K increases and L decreasesO e. K decreases and L increases

A uniform increment of the two costs by 100 percent (so the two costs twofold) We expect it to be :…

Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices double) with a fixed monetary income is equivalent to a decrease c monetary income by a factor T (so that the new income is Tm), keeping both prices fixed at their original level O a. T=0.2 O b. T=0.1 OC. T=0.25 Od. T=0.9 O e. T=0.5

Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices double) with a fixed monetary income is equivalent to a decrease c monetary income by a factor T (so that the new income is Tm), keeping both prices fixed at their original level O a. T=0.2 O b. T=0.1 OC. T=0.25 Od. T=0.9 O e. T=0.5

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.8P

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