Isovalue lines are lines along which the utility is constant. lines along which the value of input is constant. lines along which the value of output is constant. O lines along which the production cost is constant.
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Q: G5
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- Barry buyers blueberries and strawberries from a fixed budget. Draw his budget curve and indifference curve at the best feasible bundle. Now, the price of strawberries has doubled. Draw Barry's new budget curve, his new indifference curve for the best feasible bundle, and label the income and substitution effects. Clearly label your work.Question 1During the hot days, the Electricity Company generates more electricity by using more fuel and increasing the working hours of its employees. This production decision by the company is a ………. decision. long-run. intermediate run. market run. short-run. Question 2An indifference diagram has movies on the horizontal axis and sodas on the vertical axis. The marginal rate of substitution MRS measures the quantity of soda that the consumer has to give up to get one extra movie. True False Question 3As the output Q increases, the average fixed cost AFC …….., and the average variable cost AVC …….. falls continuously; has a U shape has a U shape; has a U shape falls continuously; falls continuously has a U shape; falls continuously Question 4The average total cost of production is equal to the total cost divided by the total number of output produced. True False Question 5If the average variable cost AVC is decreasing as output Q increases, then the marginal cost MC is definitely…Disscuss the Marginal rate of substitution
- Suppose the price of A is $20 per unit, the price of B is $10 per unit, and theconsumer’s income is $1000 per month. Which of the following baskets is not on theconsumer’s budget line? a) A = 40, B = 20 b) A = 5, B = 90 c) A = 2.5, B = 95 d) A = 20, B = 40Please no written by hand and no image As producers increase their output, generally the factors of production will become less productive and therefore more costly for each additional unit. This explains the law of diminishing marginal utility income effect substitution effect law of supply law of demandFor an individual the Marginal Rate of Substitution is constant and equal to 1/2 for allcombinations of goods X and Y in his consumption set. The price of good X is $12 per unitand the price of good Y is $8 per unit. The individual has a total budget of $400. Determinethe bundle of goods X and Y that maximize his utility.
- Assume the price of product Y (the quantity of which is on the vertical axis) is $10 and the price of product X (the quantity of which is on the horizontal axis) is $5. Also assume that money income is $30. The absolute value of the slope of the resulting budget line is Multiple Choice 2. 1/2. 3. 6..What is the most favorable point to exhaust the minimum cost of a producer? Select one: a. indifference curve is tangent to budget line b. AC is minimum c. AFC is minimum d. isoquant is tangent to isocostIn many cases, it is reasonable to refer to the ________________ as the price Group of answer choices budget constraint sunk cost opportunity cost marginal utility
- Inferior goods have negative income effect True/FalseInferior goods have positive income effect True/FalseWhich of the following statements accurately describes typical indifference curves? a. The slope of an indifference curve indicates the marginal rate of transformation. b. Indifference curves are down-sloping due to the diminishing average product. c. An indifference curve traces combinations of production inputs which yields the same level of production cost. d. Indifference curves represent the constraints that individuals face in their decision-making process. e. Further away from the origin an indifference curve is located, the higher level of utility it represents.
