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 77 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
:D TYSM

xiazhe

  • Member
  • Posts: 331
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Typical Examination Room Equipment and Supplies Cont. Typical Examination Room Equipment and Supplies Cont.
A typical zirconia oxygen sensor. A typical zirconia oxygen sensor.
Schematic of a typical electronic throttle control (ETC) system. Note that terminal #5 is always ... Schematic of a typical electronic throttle control (ETC) system. Note that terminal #5 is always ...
Typical Work Settings for Massage Therapists Typical Work Settings for Massage Therapists
Capital’s Share of Income in a Cross-Section of Countries Capital’s Share of Income in a Cross-Section of Countries
Estimated number of new HIV infections per year over time period in Canada Estimated number of new HIV infections per year over time period in Canada
Video: Bacteriophage (Virus) - Mice Experiment

For a complete list of videos, visit our video library