What is a budget line? What does its slope indicate?
The budget line for a household graphically represents all possible combinations of two commodities that it can purchase, given the prices of the commodities and some fixed amount of money at its disposal. Its slope is the amount of one commodity that the market requires an individual to give up to obtain one additional unit of another commodity without any change in the amount of money spent.
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If the value of an environmental benefit realized two years from todayis $970.20, and the annual rate of return is 5 percent, then its present discounted value is
a. $924 b. $880 c. $1,018.71 d. $1069.65
Which of the following statements is true of perfect competition?
A) The outcome in a perfectly competitive market is Pareto inefficient. B) The total value of production across a perfectly competitive industry is maximized. C) Firms under perfect competition produce at a point where price is greater than marginal cost. D) Consumers in a competitive market purchase at a point where marginal utility is greater than price.
Virtually all firms expend resources to do precise calculations of marginal cost and marginal revenue for decision making.
Answer the following statement true (T) or false (F)
As a result of increasing its workforce from 9 workers to 10 workers, a firm's total revenue per day increases from $60,000 to $60,250 and its total cost per day increases from $58,500 to $58,700 . The marginal profit of the 10th worker is
a. -$50. b. $50. c. $200. d. $250.