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In a two-good model, a consumer starts with an intial endowment of 12.00 units of good 1 and 10.00 units of good 2. If this consumer sold all of her units of good 2, she would be able to afford 35.00 additional units of good 1. Given this information, what is the slope of this consumer's budget line?
Amanda faces a tradeoff between labor (𝐿) and leisure (𝑅). She consumes a composite good (𝐶). When she works, she earns an hourly wage of $21.00, and she has a maximum of 24 hours to spend on labor and leisure together. Whatever time she does not spend working, she spends on leisure. Amanda starts with an initial endowment of 20.00 units of the composite good, which she can buy and sell freely at a market price of $13.00.
Given this information, what is Amanda's full or implicit income?
In a two-good market, the prices are (p1, p2) = (4, 2), and the consumer starts with an initial endowment of (ω1, ω2) = (3, 7). Which of the following would best describe a change in the consumer's endowment to (ω1, ω2) = (5, 1)?
Choose one:
A. There has been a decrease in the value of the endowment, shifting the budget line to the left.
B. There has been an increase in the value of the endowment, shifting the budget line to the left.
C. There has been a decrease in the value of the endowment, shifting the budget line to the right.
D. There has been an increase in the value of the endowment, shifting the budget line to the right.
A consumer faces a trade-off between labor and leisure. Suppose the consumer receives a raise and starts earning a higher wage. Based on the Slutsky equation, the substitution effect with respect to leisure due to this change is -18.00. However, due to the change in income, his consumption increases by 1.00 units. If this consumer can work or rest a maximum of 24 hours, how many hours must he have been working if this change in his wage doesn't lead to a change in his hours worked?
Suppose that a consumer only gets utility from the consumption of x1 and gets no utility from the consumption of x2. This consumer has an initial endowment for each good of (𝑥1,𝑥2)=(10,10). If the prices for each good change from (𝑝1,𝑝2)=(5,5)
to (𝑝1,𝑝2)=(7,5) will this consumer be made better off or worse off?
Choose one:
A. worse off
B. better off
C. no change
D. unable to determine from information given
What is the total change in demand if the change due to the substitution effect is -13.00, the change due to the ordinary income effect is 14.00, and the change due to the endowment income effect is 8.00?
Qd = 180 - 2P,
Qs = ‐ 15 + P
The market is government-regulated with a price support per unit and production quotas. If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or surpluses?
a.an increase in the demand for the good. new demand equation is Qd = 190 - 2P. The government is trying to decide between two options:
Maintain the number of quotas and let the market adjust, or
Maintain the price support and increase the number of quotas.
Suppose that the government decides to maintain the number of quotas and let the market adjust, what is:
The price observed in the market?
The consumer surplus?
The producer surplus?
The deadweight loss?
b. Suppose the government decides to increase the number of quotas available to 72 units but it keeps the price support at the current level of $72, what is:
The consumer surplus?
The producer surplus?
The deadweight loss?
c. Which of the government options in 1a. will be preferred by: The Producers? The Society?
in what ways is econoics a science
