The above figure depicts the Edgeworth box for two individuals, Al and Bruce. If the endowment is at point a, and Al has no ability to bargain, the final allocation will be at point
A) a.
B) b.
C) c.
D) d.
C
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Refer to Figure 3-1. If the product represented is an inferior good, an increase in income would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
Suppose you only consume food and clothing, and clothing is plotted on the vertical axis. Also, you purchase food at a fixed price (PF), but the price of clothing declines as you buy in larger quantities (i.e., quantity discounts)
What does the budget line look like in this case? A) The budget line is a straight line B) The budget line is now concave to (bows out from) the origin C) The budget line is now convex to (bows in toward) the origin D) The budget line will not be a straight line, but it may be concave or convex
Moving along an elastic portion of a demand curve, a small percentage change in price leads to a larger percentage change in quantity demanded
a. True b. False Indicate whether the statement is true or false
If wages are relatively high, the individual labor supply curve may
A. Become horizontal. B. Bend backward. C. Become vertical. D. Bend outward.