Author Question: Joe's income is 500, the price of food (F, y-axis) is 2, and the price of shelter (S, x-axis) is ... (Read 26 times)

jilianpiloj

  • Hero Member
  • *****
  • Posts: 521
Joe's income is 500, the price of food (F, y-axis) is 2, and the price of shelter (S, x-axis) is 100. Which of the following bundles is in Joe's opportunity set?
 
  A) 50 units of food, 5 units of shelter
  B) 200 units of food, 2 units of shelter
  C) 100 units of food, 1 unit of shelter
  D) 150 units of food, 3 units of shelter

Question 2

Jill consumes nothing but soup and cola. If cola is a luxury good for Jill, then soup must be a necessity.
 
  Indicate whether the statement is true or false



dantucker

  • Sr. Member
  • ****
  • Posts: 346
Answer to Question 1

C

Answer to Question 2

True . The weighted sum of income elasticities must sum to one. Because the income elasticity of cola is >1, the income elasticity of soup must be <1.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

There are over 65,000 known species of protozoa. About 10,000 species are parasitic.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

For a complete list of videos, visit our video library