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True or false?
While the endowment bundle must lie on the original budget line, it need not lie on the budget line when prices change.
True or False?
When the good on the horizontal axis is a composite good, the slope of the budget constraint is minus the price of the good on the vertical axis.
True or false?
When the good on the vertical axis is a composite good, the slope of the budget line is equal to minus the price of the good on the horizontal axis.
True or False?
If a consumer's fixed income increases, his opportunity cost also increases.
True or False?
In a graph of choice sets, a price change causes the slope of budget lines to change.
true or false?
If all consumers are price-takers facing the same prices, then all choice sets are the same.
From the figures given below;
OUTPUT(UNITS) TOTAL REVENUE
50 750
60 840
70 910
80 960
90 990
100 1000
You are required to:
a) Calculate the average revenue [3 marks]
b) Calculate the marginal revenue [2 marks]
c) Draw the average revenue curve [2 marks]
d) Determine the market structure [1 mark]
e) Mention two features of the market structure in (d) [2 marks
Select one
Consider a pure exchange economy of two individual A and B and two goods X and Y assume both the individual are endowed with two units of good X and 1 unit of good y each
Let utility function of individual A and B be Ua = min {Xa ,Ya} and Ub =min Xb/4,Yb}where xiand yi for i ={A,B} represent individuals consumption of good X and Y respectively . Determine the aggregate excess demand function for each good
Consider the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes and, at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.
