ty axl illeT, he/she will respond by? a. Consuming less jam and less bread b. Co

Question

ty axl illeT, he/she will respond by? a. Consuming less jam and less bread b. Consuming less jam and more bread c. Consuming more jam and less bread d. Consuming more jam and more bread Refer to Figu on jam and bread. Th 34. re 13-6. Assume that the consumer depicted in the figure has an income of $20 to spend entirely e price of a loaf of bread is $4. This consumer will choose a consumption bundle where the marginal rate of substitution is equal to which of the following? a. b. 1/2 c. 1/3 d. 2/3 35. Typically, as a firm hires additional workers, what happens to the marginal product of labour and the marginal revenue product? a. The marginal product of labour and the marginal revenue product both decrease. The marginal product of labour decreases and the mar c. The marginal product of labour stays constant and to d. The marginal product of labour decreases and the marginal revenue b. ginal revenue product stays constant. decreases. the marginal revenue product product increases. Page 10 of 15

Explanation / Answer

At the optimal consumption bundle, MRS = Price of Jam/price of Bread

Here, Income = $20

Optimal bundle is A(4,3)

Price of Jam * Quantity of Jam + Price of Bread * Quantity of Bread = Income

Pjam * 4 + 4 * 3 = 20

Price of jam = $2

Therefore, MRS = Price of Jam / Price of Bread = 2 / 4 = 1/2

OPTION B

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.