Question

Determine and specify whether the statement is best characterized as “True,” “False,” or if there is insufficient information to make a definitive conclusion (“Uncertain”) (choose only one of these three responses); and (ii) Provide a brief explanation justifying your determination

You must provide an explanation to receive any points. Do not simply repeat the statement if it is determined to be true, and do not simply negate the statement if it is determined to be false.

1. “John only consumes two goods: coffee and sugar, and he consumes these goods in a particular manner. Specifically, he always uses exactly two teaspoons of sugar in each cup of coffee (perfectly measured) he drinks. If any more sugar is added to his cup of coffee, or if he is given more than a cup-serving of coffee with two tablespoons of sugar, he is not made any better or worse off. If John’s monthly income (?) is $100, and the price of a cup of coffee (??) and the price of a teaspoon of sugar (??) are each $1, then John will consume 50 cups of coffee per month.”

2. “If a firm’s total cost function is given by ??(?, ?, ?) = √??? where the variables ? and ? denote the (per-unit) input prices of labor (l) and capital (?), respectively, then its “conditional” demand for labor is increasing in ?.

Answer 1