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Sketch the following budget constraints:

Income elasticity of demand measures the responsive-ness of demand to changes in income. Explain what is happening to demand and what kind of good is being represented in the following situations. a. Income is rising, and income elasticity of demand is positive.b. Income is rising, and income elasticity of demand is negative.c. Income is falling,

Duty charges and VAT on alcohol vary across different parts of Europe. For example, a bottle of wine bought in Britain incurs a £1.90 duty charge and 20 percent in VAT. A bottle of wine in Italy incurs no duty charge, but slightly higher VAT at 22 percent. (See http://i.telegraph.co.uk/multimedia/archive/03306/taxes_3306215b.jpg for rates across Europe). Assume

The following table gives a hypothetical total utility schedule for the Cookie Monster (CM): Calculate the CM’s marginal utility schedule. Draw a graph of total and marginal utility. If cookies cost the CM 5 cents each and CM had a good income, what is the maximum number of cookies he would most likely eat in

For this problem, assume that Kendrick has $144 to spend on cigars and brandy each month and that both goods must be purchased whole (no fractional units). Cigars cost $6 each, and brandy costs $30 per bottle. Kendrick’s preferences for cigars and brandy are summarized by the following information: a. Fill in the figures for

Jonas is a German native who has lived for the past 4 years in the UK pursuing his undergraduate study in Economics. For each of the last 4 years, he has made trips back to Germany for Christmas, Easter and the summer. During 2015, the price of a round-trip train ticket from London to Frankfurt

The table shows Darlene’s marginal utility numbers for ice cream sundaes and milkshakes. Darlene is trying to decide which item to purchase first, a sundae or a milk-shake, knowing that she wants to receive the most utility for each dollar she spends. Assuming she has enough money in her budget to purchase either item, which

The following table gives total output or total product as a function of labor units used. a. Define diminishing returns.b. Does the table indicate a situation of diminishing returns? Explain your answer.

The following table represents data for Sally’s Salon. Draw a graph showing the total product, marginal product of labor, and average product of labor. Identify where increasing returns, diminishing returns, and negative returns set in on the total product curve.

The following is a production function. a. Draw a graph of marginal product as a function of output. (Hint: Marginal product is the additional number of units of output per unit of labor at each level of output.) b. Does this graph exhibit diminishing returns? Explain your answer.