occurs at points above, it can be seen that consuner equilibrium a. b. B C. c ls
ID: 1105328 • Letter: O
Question
occurs at points above, it can be seen that consuner equilibrium a. b. B C. c lse this diagran for question 13 13. In the diagrem above, the budget constraint has shif ted from AB to Ac. This shift is the reault ofs a. a reduction in the consuner's income b. a decrease ia the price of oranges c. an increase in the price of appies d. an incresae in the rice of oranges 14. In econonica, the long run ia considered to be a perlod of: a. at least six nonths . tine of sutficient length to require that iaplioit coats be takan d., tiue of aufficient length to allow ail factora of production to tine greater than fivs years into account in the production process be varied 15. A business firn will be earning econoade profits if its total revenne excesds its: a. total fixed costs b. total variable costs a, verage variable costs d. total ccats, including a rate of return to the owner equal to his or her naxt beat opportunity 16. Total ucility will be maxiaized when: the narginal utility,derived from the last doll r spent on a particular good is greater than for all previous goods purchased botà tho marginal utility and the total utility are negative the marginal utility per dollar is the same for all goods conaumed . b. c. d. the marginal utility derived from the last unit just exceeda the to al utilityExplanation / Answer
12. Consumer equilibrium is said to be achieved where the budget line is touching the highest attainable budget line from below. In the diagram, consumer equilibrium point is point D where the budget line AB touches the highest attainable Indifference curve, IV from below.
Answer- option (d)
13. Shift from AB to AC is the result of an increase in the price of oranges. With increase in orange price, consumers buys OC amount of orange but amount of Apple remains same i.e. OA.
Answer- option (d)
14. In long run, firms are able to adjust all costs as well as factors of production. But in short run firms are only able to influence the prices with adjustment made to the production level. So, long run is not a specific time period but a sufficient amount of time that allows all costs and factor of production to be varied.
Answer- option (d)
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