Question

10 C) net opsimal ) The qurstion cannot be anewesed withoat more inlermution A) we lace a tredelf and incur an 19) Whm producing at a production ofSiclent point By the opportunity con of another good is nere Dj our dhoice of dhe goods cam be either on or within the production powbiliaies troier T) at least heo from answens A through D ae comect The price elasticity of demund for DVIs is 2 quantity demanded " the price of a DVD increased by 2 pencent the 2%) A) decrmase by 4 percent 8) decrease by 2 peront C) not chang D) change by an amount that depends on the Initial prlo E) decrease by 1 percent

Answer 1

18) Slope of the indifference curve = MRS and MRS = slope of the budget line when both are tangent such as at point a. Hence MRS = (0-6)/(12-0) = -1/2. (Select B)

19) There is a tradeoff because resources are fully utilized at PPF. When production of one good rises the other is reduced because the same resources are diverted to the production of some other good (Select A)

28) Given that ed = 2, Price increased by 2% so quantity demanded would change by -2*2% = -4%(Select A)