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Assume you have $10 to spend on either apples or chocolate. The price of a pound of apples is $3/pound and the price of chocolate is $5/pound.
a) Graph the consumption possibilities curve
b) What is the opportunity cost of the 1st pound of chocolate?
c) What is the opportunity cost of the last pound of chocolate?
d) Assume you get an additional $5 and you find out that the price of apples has increased from $3/pound to $3.50 pounds. Draw the new consumption possibilities curve
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Suppose an individual is faced with two goods: income and leisure. The basic wage rate is 8 dollars per hour but if the individual works more than 8 hours a day, he or she get's an overtime pay of $12. Draw the budget line for this individual.
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Ilustrate what concern would you have about this sale and or lease back contract. Explain how would you price these two events differently.
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Compute the regular expenditure multiplier also the net tax multiplier if the level of consumption increases from $80,000 to $92,000 as a result of change in income from $120,000 to $140,000.
Why are assumptions made when utilizing a mode also thinking about economic activity. Textiles also apparel accounts for Illustrate what fraction of industrial employment in Pakistan.
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