3. The following table shows production possibilities for Li and Raj. Li’s Production Per Day | Raj’s Production Per Day Cupcakes Muffins Cupcakes Muffins 0 12 0 16 1 9 1 12 2 6 2 3 3 3 4 0 4 0 a. Fill in the table below as follows (10 marks): . The first 2 columns represent joint production where Li and Raj produce equal quantities. o The last 2 columns represent joint production where they each produce according to their comparative advantage (specialization). Combined PPF (Equal Quantities) Combined PPF (Specialization) Cupcakes Muffins Cupcakes Muffins 0 0 2 N 4 4 6 6 8 00 b. Plot the combined production possibility curves for both cases (equal quantities & specialization), with cupcakes on the horizontal axis, on the same graph). (10 marks)
Q
64: Economics – Others:
If x1 is a normal good and x2 is a neutral good, the slope of the indifference curve will be O A. Positive O B. Negative O C. Zero (horizontal) O D. Undefined (vertical) I have income of 120. If a value added tax of 0.5 is applied to all goods, it is the equivalent of a reduction of in income. Round to two docimal places. (For this question, a tax of 0.1 moons 10%%, a tax of 0.2 moans 20% and soon.) X1 is an inferior good. If the price of X1 increases, the substitution effect will cause the quanity of X1 purchased to decrease. O True O False
Leave a Reply