Suppose we change Q& A 4.4 so that Max and Bob have indifference curves that are convex to the origin. Use a figure to discuss how the different slopes of their budget lines affect the choices they make. Can you make any unambiguous statements about how many total books each can buy? Can you make an unambiguous statement if you know that Bob’s budget line goes through Max’s optimal bundle?
Answer to relevant QuestionsRalph usually buys one pizza and two colas from the local pizzeria. The pizzeria announces a special: All pizzas after the first one are half- price. Show the original and new budget line. What can you say about the bundle ...Draw diagrams similar to figure but with different shape indifference curves to show that as the price of tracks rises, the amount of live music Jack will buy may rise or fall.Suppose that for the production function q = f( L, K), if L = 3 and K = 5 then q = 10. Is it possible that L = 3 and K = 6 also yields q = 10 for this production function? Why or why not? The production function at Ginko’s Copy Shop is q = 1,000 × min( L, 3K), where q is the number of copies per hour, L is the number of workers, and K is the number of copy machines. As an example, if L = 4 and K = 1, then ...Michelle’s business produces ceramic cups using labor, clay, and a kiln. She produces cups using a fixed proportion of labor and clay, but regardless of how many cups she produces, she uses only one kiln. She can ...
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