You are trying to maximize your output subject to a budget. At one possible input bundle, where the constraint is binding, you find MPL > MPK.As long as MPL > MPK, you should keep spending more of your budget on labor and less on capital. True False
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- The graph below is Mendork's production possibility curve for the only two goods that it produces: quirks and quarks. Quantity of Quarks 800 700 600 500 400 300 200 100 2 4 6 8 10 12 14 16 18 20 Quantity of Quirks Note: If the image does not appear, right-click on the placeholder and choose Show picture or View image. If Mendork's current production is at point A, what is the (approximate) cost of producing one more quirk? a) 50 quarks B b) 100 quarks c) 200 quarks d) One more quark e) 25 quarksSpecify and explain the typical shapes of marginal-benefifit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefifit, should more or fewer resources be allocated to this product? Explain.The table below shows the marginal benefit for various inputs. Assume that each level represents a $100 investment, and answer the following questions. (a) If you have an unlimited budget, how much would you spend on each input? Explain.(b) Now, assume you can spend a maximimum of $500. What would you spend on each inputnow? What order would you buy them in?(c) Finally, assume you can borrow as much as you want with an interest rate of 10%. How muchwill you borrow and how will you spend it if you have to pay back the loan within 1 year?
- In a microeconomic model, how would you differentiate between an 'exogenous' variable and an 'endogenous' variable? O Endogenous variables are those determined within the model, while exogenous variables are given from outside the model. O Exogenous variables are those which economists do not study, while endogenous variables are heavily studied. O Exogenous variables are variables that economists cannot measure, while endogenous variables are measurable. Exogenous variables cannot influence endogenous variables in any economic model. O More than one of the above.An individual's budget Suppose Edison has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If Edison spends his entire $32 on coffee, he can buy cups of coffee. If he spends his entire $32 on cereal, he can buy boxes of cereal. Use the blue line ( circle symbol) to plot Edison's budget line on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of coffee and cereal that are affordable for Edison. Finally, place the black point (plus symbol) on the point on Edison's budget line that corresponds to a scenario in which Edison spends $16 on each good. Note: Dashed drop lines will automatically extend to both axes. (?)-OBL, ($32) Affordable Region $16 on Each1. An individual's budget Suppose Bob has a yearly budget of $120 to spend on oat milk and peanut butter. Oat milk is priced at $2 per quart, and peanut butter is priced at $6 per jar. If Bob spends his entire $120 on oat milk, he can buy jars of peanut butter. Use the blue line (circle symbol) to plot Bob's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of oat milk and peanut butter that are affordable for Bob. Finally, place the black point (plus symbol) on the point on Bob's budget constraint that corresponds to a scenario in which Bob spends $60 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 + 40 50 60 70 OAT MILK (Quarts) quarts of oat milk. If he spends his entire $120 on peanut butter, he can buy + + 80 90 + H 100 110 120 BC, ($120) ☐ Affordable Region $60 on Each BC₂ ($240) ?
- Karina is able to select her weekly work hours. When a new busway route opens up and starts to operate immediately, it cuts one hour off Karina’s total daily commute to work. If both leisure and income are normal goods, what is the effect of the shorter commute on Karina’s work time? Hint: Draw the budget constraint before and after new busway route opens up and explain what happen. You may set up Karina’s initial condition hypothetically. Following, describe about substitution and income effect.Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum.Production in this economy is subjected to the law of diminishing marginal returns and resourcesare assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions: i. Draw the economy’s production possibility frontier on hindsight of the relevantassumption.If you claim that an increase in the tax on groceries will result in an increase the price of groceries, then you are making a O positive statement. O macroeconomic statement. Onormative statement. rational-decision statement. marginal statement.
- Q35 Statement for Q36-Q41 Kayla and Josel produce food and luxury goods. Kayla has 10 hours; it takes her 1 hour to produce 1 unit of food and 2 hours to produce 1 unit of luxury goods. Josel has 20 hours; for the first 8 hours of producing food, it takes him 2 hours to produce 1 unit of food. Then, beyond 8 hours, Josel is less productive and it takes him 4 hours to produce 1 additional unit of food. It takes Josel 2 hours to produce 1 unit of luxury goods no matter how many hours are allocated into the production of luxury goods. MAKE SURE YOU REFER TO THE ABOVE STATEMENT FOR QUESTIONS 36-41 Save Answer Q36 Suppose that Kayla and Josel trade only with each other, and agree to the following terms of trade: 2 units of food in exchange for 3 units of luxury goods. What is the relative price of 1 unit of food in terms of units of luxury goods? O A. 2/3. O B. 3/2. O C. 2/3 if within the first 8 hours of producing food for Josel, and 3/2 otherwise. O D. 3/2 if within the first 8 hours of…As an economist it is important to know that resources are scarce. Explain what u understand that resources arenscarce in economic termsYou Answered Correct Answer Question 19 Note: The basic scenario is the same as in Question 18, but input numbers are different. Suppose that farmer Maria has a budget of $4,380 that she plans to spend entirely on diesel fuel for her tractor, and fertilizer for her crops. Maria's budget line represents all the different quantities of fuel and fertilizer that she can buy with her $4,380. It can be graphed with fuel on the vertical axis and fertilizer de the horizontal axis. Diesel sells for $2.55/gallon; fertilizer goes for $2.45/pound. If she buys 1,036 gallons of diesel for the tractor, how many pounds of fertilizer will she purchase? (round to the nearest pound) Hint: Figure out what the budget equation looks like, in terms of prices and quantities of both goods, and solve it for the quantity of fertilizer. 710 margin of error +/- 2