If a consumer's income increases and if all goods are normal goods, explain how the quantity bought of each good changes
What will be an ideal response?
If the consumer's income increases and all the goods consumed are normal goods, then the consumption of all goods increase. With the increase in income, the initial consumption possibility is now affordable with money left over. If the consumer's utility for all goods increases with consumption, because the consumer seeks to maximize utility subject to prices and available income, he or she will use the money left over from the initial bundle to increase the quantity consumed for all goods and services. By doing so the consumer increases his or her total utility. This increase occurs while the price of these goods and services remained unchanged, which indicates there is a rightward shift of the demand curve for all goods and services.
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Refer to the table below. What is the profit-maximizing total quantity for Just Juice to produce?
Just Juice produces whole fruit juice that it sells in single bottles. Just Juice is a multi-plant firm with market power. The above table summarizes the total marginal cost of production at various output levels in Just Juice's two plants with the corresponding marginal revenue (dollars per bottle) and market demand (price per bottle).
A) 530
B) 955
C) 850
D) 1,100
In Figure 31.2, what is the difference between the marginal revenue product of the last worker hired by the monopsonist and the wages the monopsonist pays the last worker?
A. $5 per hour. B. $3 per hour. C. $4 per hour. D. $2 per hour.
The average variable cost curve and the average total cost curves are intersected at their __________ by the marginal cost curve.
Fill in the blank(s) with the appropriate word(s).
The fact that you can use money to buy things is a result of which characteristic?
A. The fact that it is a measure of value. B. Its use as a medium of exchange. C. The fact that it is a store of value. D. The fact that it is backed by gold.