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 110 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
Excellent

vickyvicksss

  • Member
  • Posts: 351
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

According to the FDA, adverse drug events harmed or killed approximately 1,200,000 people in the United States in the year 2015.

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

There are more bacteria in your mouth than there are people in the world.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Structure of a typical neuron. Structure of a typical neuron.
Race-Ethnicity and Income Extremes Race-Ethnicity and Income Extremes
Typical engine analyzer hookup that includes a scope display. (1) Coil wire on top of the ... Typical engine analyzer hookup that includes a scope display. (1) Coil wire on top of the ...
Income Inequality in the United States: 1947–2009 Income Inequality in the United States: 1947–2009
A company spends $117 500 today and has positive cash inflows of $34 000 for each of the next 6 ... A company spends $117 500 today and has positive cash inflows of $34 000 for each of the next 6 ...
The Serial Numbers for Each Day of the Year The Serial Numbers for Each Day of the Year
Video: Evolutionary tree of life Animation

For a complete list of videos, visit our video library