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What income would the consumer need to attain the original level of utility when the price of X increases to $5 per unit?
What will happen to Yoshi's consumption of soda? Show, using an indifference curve diagram with soda on horizontal axis and composite good on the vertical axis.
What is Brady's price elasticity of demand for salt? What can we say about Brady's income elasticity of demand for salt?
Mitch cares only about how much he can write. Use indifference curve analysis to derive the demand curve for pencils.
Carmen's preferences are such that she is always indifferent between watching two movies or seeing. What must Carmen's indifference curves look like?
If Alfred employs 3 workers, how many machines will he have to use to achieve the production level you found in (a)? What happens to the isoquant you drew?
Draw the production isoquant corresponding to filling 30 potholes. Assume that production displays constant returns to scale, and draw a few more isoquants.
With the production function Q = 2 min(K,?L) and the cost function C = 2K + 3L, what combination of inputs minimizes costs for Q = 10?
She also reports that the MRTSLK in Rice county is higher than the MRTSLK in neighboring Reno county. Are you minimizing your costs? Explain.
what will the firm's marginal rate of technical substitution be? What is the maximum number of iPods it can produce?
Baldor, Inc. measures the marginal rate of technical substitution (MRTS) at MPL/MPK = 3. What can Baldor do to improve its situation?
Does your answer to (a) change if Gloucester originally only uses 17 ATMs? 30 ATMs? What do production isoquants look like for Gloucester Old Bank?
What ratio of capital to labor minimizes Jake and Paul's total costs? How much will hiring these inputs cost them?
What is the vertical intercept of the line you drew? The horizontal intercept? What does each represent?
Do both labor and capital display diminishing marginal products? Does the isoquant you drew in (a) display a diminishing marginal rate of technical substitution
As K increases, what happens to the marginal product of labor? What happens to the marginal product of capital as K increases? As L increases?
How much would consumer surplus change if the rising cost of fuel led airlines to raise the price from $150 to $200?
How does a tax affect consumer and producer surplus? Why does a tax create a deadweight loss? How does a subsidy affect consumer and producer surplus?
Why is the relative size of crowding out inefficiencies dependent only on the elasticity of demand and not on the elasticity of supply?
What is a deadweight loss? If the price elasticity of a good is large, would you expect the deadweight loss to be large or small?
How does a demand shift affect consumer and producer surplus in a given market? Consider both inward and outward shifts of the demand curve.
Define consumer and producer surplus. What is the demand choke price? How does this price relate to consumer surplus?
What sign might you expect the income elasticity to have if the good in question is Swedish massages?
What sign might you expect the cross-price elasticity to have if the two goods are shampoo and hair conditioner? Why?
If the price elasticity of demand for sales is -?2.66, how much should Sal lower his price in order to meet his goal?