What is the budget line?
What will be an ideal response?
Answer: It represents the various combinations of two goods which can be purchased with a given money income and assumed prices of goods.
Assumptions of Budget Line:
- The prices of the two goods (X and Y) have been determined in the market, and they are given and constant for the consumer.
- The consumer has a fixed amount of money income to spend on the two goods.
- The consumer wants to maximise utility.
- He can purchase any combination of the goods if his budget permits
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5.If this economy is open to trade, and the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then domestic price of the car will be ________.
A. $6,000 B. $5,000 C. $10,000 D. $8,000
Kyle and Stan are playing Odds or Evens, where Kyle is designated as the "odd" player and Stan is designated as the "even" player. They decide to play the game 10 times. If Kyle adopts a pure strategy of "shoot 2," Stan shoul
A) also adopt a pure strategy of "shoot 2." B) adopt a pure strategy of "shoot 1." C) adopt a mixed strategy of "shoot 1" 50% of the time and "shoot 2" 50% of the time. D) adopt a mixed strategy of "shoot 1" more than 50% of the time and "shoot 2" less than 50% of the time.
Assuming upward sloping labor supply, wage subsidies are definitely more inefficient
A. the more elastic labor demand is. B. the more elastic labor supply is. C. the more substitutable consumption and leisure are. D. Both (a) and (b) E. Both (b) and (c) F. Both (a) and (c) G. All of the above H. None of the above
The figure above shows the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour
With the minimum wage law enacted, at the quantity of labor employed, the value to the firm of last worker hired is ________ the wage rate for which that person is willing to work. A) the same as B) $3 per hour less than C) $3 per hour greater than D) $1 per hour greater