Question

When Joe went back to college to finish his degree in Economics, he cut back from full-time to part-time work at his firm. During this time, the lease on his SUV ran out and he leased a smaller compact car as a result.

The smaller compact car is an example of which type of good?

• Inferior

• Veblen

• Normal

• Giffen

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Which of the following defines cost minimization?

• A firm’s output strategy that incurs the least amount of expenditure

• The sacrifice made by choosing one value or opportunity over another

• A firm’s procedure for determining supply and cost that yields the greatest gain

• The amount of utility gained by a firm as a result of producing an additional unit of a particular good

Answer 1

answer is (A)

when Joe changed his job from full time to part time, his income also affected and lease for SUV ran out and he had to take small compact car on lease. it means that when income decrease as he switched to part time job he prefer to some less valuable or quality of goods that we consider as inferior. so when income decrease job shift to some inferior goods.

2 answer is A

firm's output strategy that incurs the least amount of expenditure. it is concerned with minimize the cost of producing whatever output it chooses.