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

Author Question: The figure above contains several budget lines for Sarah, who uses her income to purchase two goods, ... (Read 126 times)

tfester

  • Hero Member
  • *****
  • Posts: 534
on: Jun 29, 2018
The figure above contains several budget lines for Sarah, who uses her income to purchase two goods, cheese and crackers.
 
  a) A movement between which two budget lines represents an increase in income?
  b) A movement between which two budget lines represents an increase in the price of a pound of cheese?
  c) A movement between which two budget lines represents an increase in the price of a box of crackers?

Question 2

A firm increases both its plant and its labor force by the same percentage and its average total costs remain unchanged. Is the firm experiencing increasing returns to scale, constant returns to scale, or decreasing returns to scale?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

joechoochoy

  • Sr. Member
  • ****
  • Posts: 306
Reply #1 on: Jun 29, 2018
Answer to Question 1

a) A movement from BL1 to BL3 shows an increase in income.
b) A change from BL2 to BL1 shows an increase in the price of a pound of cheese.
c) A change from BL3 to BL2 shows an increase in the price of a box of crackers.

Answer to Question 2

The firm is experiencing constant returns to scale.


tfester

  • Hero Member
  • *****
  • Posts: 534
Reply #2 on: Jun 29, 2018
Thank you :)


joechoochoy

  • Sr. Member
  • ****
  • Posts: 306
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Imaginary Thoracic Lines, Anterior View Imaginary Thoracic Lines, Anterior View
Mark Twain supplemented his income as a writer by giving humorous lectures. Mark Twain supplemented his income as a writer by giving humorous lectures.
Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages
Relationship between Income Inequality and the Desired Tax Rate Relationship between Income Inequality and the Desired Tax Rate
Capital’s Share of Income in a Cross-Section of Countries Capital’s Share of Income in a Cross-Section of Countries
How Many Triangles Can You Make Using the Letter M and 3 Straight Lines? How Many Triangles Can You Make Using the Letter M and 3 Straight Lines?
Video: Gas exchange - driving force

For a complete list of videos, visit our video library