(1A) If the consumer's income and all prices simultaneously decrease by one-half, then theoptimum consumption bundle will:a. shift outward relative to the original optimum.b. move leftward along the original budget constraint.c. shift inward relative to the original optimum.d. not change.Answer for Question 1A:(1B) Two companies, Acme and Pinnacle, each decide whether to produce a good quality productor a poor quality product. In the figure, the dollar amounts are payoffs and they represent annualprofits for the two companies.Acme's DecisionGood QualityРoor QualityAcme's profit = $6 millionAcme's profit = $5 millionGood QualityPinnacle's profit = $6 millionPinnacle's profit = $8 millionPinnacle'sDecisionAcme's profit = $8 millionAcme's profit = $7 millionPoor QualityPinnacle's profit = $5 millionPinnacle's profit = $7 millionIf this game is played only once, then the most likely outcome is that:a. both firms produce a poor quality product.b. Acme produces a poor quality product and Pinnacle produces a good quality product.c. Acme produces a good quality product and Pinnacle produces a poor quality product.d. both firms produce a good quality product.Answer for Question 1B:

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(1A) If the consumer's income and all prices simultaneously decrease by one-half, then the optimum consumption bundle will: a. shift outward relative to the original optimum. b. move leftward along the original budget constraint. c. shift inward relative to the original optimum. d. not change. Answer for Question 1A:

(1A) If the consumer's income and all prices simultaneously decrease by one-half, then the optimum consumption bundle will: a. shift outward relative to the original optimum. b. move leftward along the original budget constraint. c. shift inward relative to the original optimum. d. not change. Answer for Question 1A:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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