Microeconomics Answers

True or False?

Homothetic tastes are always tastes over essential goods.

True or False?

For choice sets generated from endowment bundles, the budget line will shift parallel if both prices change by the same proportion.

True or False?

For choice sets emerging from “exogenous” income, the budget line will shift parallel whenever both prices change by the same percentage.

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