Explain why a consumer’s optimal choice is the point at which her budget constraint is tangent to an indifference curve.
Answer to relevant QuestionsConsider the utilitarian social welfare function and the Rawlins social welfare function, the two social welfare functions described in Chapter 2. a. Which one is more consistent with a government that redistributes from ...Consider a free market with demand equal to Q = 1,200 – 10P and supply equal to Q = 20P. a. What is the value of consumer surplus? What is the value of producer surplus? b. Now the government imposes a $10 per unit subsidy ...Your state introduced a tax cut in the year 1999. You are interested in seeing whether this tax cut has led to increases in personal consumption within the state. You observe the following information: Year . Consumption in ...Consider the example presented in the appendix to this chapter. Which coefficient estimates would be considered “statistically significant” or distinct from zero? The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in foreign country. How would this policy affect the levels ...
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