Graphically, the optimum choice of a consumer is determined at:
a. the point of intersection of the lowest indifference curve and the budget constraint.
b. the point of intersection of the budget line and the vertical axis
c. the point where the highest indifference curve is tangent to the budget constraint.
d. the point of intersection of the budget line and the horizontal axis.
c
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Given that India and Sri Lanka are trading partners, if Sri Lanka experiences a recession, the aggregate demand curve of India will shift to the right
a. True b. False Indicate whether the statement is true or false
Economies of scale exist whenever:
A. average total costs are stationary as output increases. B. average total costs increase as output increases. C. average total costs decline as output increases. D. average total costs increase as output increases and average total costs are stationary as output increases.
Explain why the long-run product price for a perfectly competitive firm will equal its minimum average total cost
What will be an ideal response?
Refer to Scenario 9.5 below to answer the question(s) that follow. SCENARIO 9.5: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 percent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $3 on average per meal. Refer to Scenario 9.5. In the long run, the restaurant will want to
A. operate but not expand. B. go out of business. C. operate and expand. D. shut down but not go out of business.