Question;1. If;all consumers are price-takers facing the same prices, then their budget lines;will all have the same slope.;2. If;all consumers are price-takers facing the same prices, then all choice sets are;the same.;3. Regardless;of which consumption bundle in her choice set a consumer chooses, she will;spend all of her available income.;4. Kinks;in budget constraints always produce non-convexities in choice sets.;5. The;only way for a consumer choice set to be non-convex is for the budget line to;be kinked.;6. When;the good on the vertical axis is a composite good, the slope of the budget line;is equal to minus the price of the good on the horizontal axis.;7. When;the good on the horizontal axis is a composite good, the slope of the budget;constraint is minus the price of the good on the vertical axis.;8. While;the endowment bundle must lie on the original budget line, it need not lie on;the budget line when prices change.;9. For;choice sets emerging from ?exogenous? income, the budget line will shift;parallel whenever both prices change by the same percentage.;10. For;choice sets generated from endowment bundles, the budget line will shift;parallel if both prices change by the same proportion.
Paper#55018 | Written in 18-Jul-2015Price : $22