This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Median household income is 50,000 per year. The typical household spends about 125 per year on milk, ... (Read 122 times)

natalie2426

  • Hero Member
  • *****
  • Posts: 524
on: Jul 1, 2018
Median household income is 50,000 per year. The typical household spends about 125 per year on milk, which has an income elasticity of about 0.07. From this information, we can conclude that
 
  A) milk is a luxury.
  B) milk is a Giffen good.
  C) the income effect from a change in the price of milk is very large.
  D) the income effect from a change in the price of milk is very small.

Question 2

Joe and Rita each have some milk and cookies (Milk on the horizontal axis). Joe's MRS of cookies for milk is 2. Rita's MRS of cookies for milk is 4. Which of the following statements is TRUE?
 
  A) No gains from trade are possible.
  B) Both Rita and Joe can be made better off if Rita gives Joe some cookies in exchange for milk.
  C) Rita and Joe are on the contract curve.
  D) Both Rita and Joe can be made better off if Joe gives Rita some cookies in exchange for milk.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

jliusyl

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

B


natalie2426

  • Member
  • Posts: 524
Reply 2 on: Jul 1, 2018
Wow, this really help

triiciiaa

  • Member
  • Posts: 349
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

A Typical Pattern of Sleep Stages During a Single Night A Typical Pattern of Sleep Stages During a Single Night
A typical output driver. In this case, the PCM applies voltage to the fuel pump relay coil to ... A typical output driver. In this case, the PCM applies voltage to the fuel pump relay coil to ...
A view of a typical filler tube with the fuel tank removed. Notice the ground strap used to help ... A view of a typical filler tube with the fuel tank removed. Notice the ground strap used to help ...
Relationship between Income Inequality and Sociopolitical Instability Relationship between Income Inequality and Sociopolitical Instability
Saving Rate by Decile of Income per Capita Saving Rate by Decile of Income per Capita
One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ... One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ...
Video: Polymerase chain reaction PCR - Animation

For a complete list of videos, visit our video library