What do you expect to happen to the prices of the two goods

Reference no: EM13902699

Jennifer and Drew consume orange juice and coffee. Jennifer's MRS of orange juice for coffee is 1 and Drew's MRS of orange juice for coffee is 3. If the price of orange juice is $2 and the price of coffee is $3, which market is in excess demand? What do you expect to happen to the prices of the two goods?

Reference no: EM13902699

Questions Cloud

Using the net realizable method assign costs to l and t : The sales revenue from L amounts to $200,000 of the total. Using the net realizable method, assign costs to L and T for January.

What were the total costs of product x and y : Assuming that joint product costs are allocated using the physical quantities method, what were the total costs of product X (including $18,000 if processed further)?

Explain the physiology of the fun fact : Explain the physiology of the fun fact

Briefly discuss which division appears most successful : Briefly discuss which division appears most successful and why. Assume a prospective project for Division X has operating income of $10,000, average operating assets of $60,000.

What do you expect to happen to the prices of the two goods : Jennifer and Drew consume orange juice and coffee. Jennifer's MRS of orange juice for coffee is 1 and Drew's MRS of orange juice for coffee is 3. If the price of orange juice is $2 and the price of coffee is $3, which market is in excess demand? W..

Draw an edgeworth box diagram : Draw an Edgeworth box diagram to show whether this alloca- tion of resources is efficient. If it is, explain why. If it is not, what exchanges will make both parties better off?

What is the marginal rate of transformation : What is the marginal rate of transformation (MRT)? Explain why the MRT of one good for another is equal to the ratio of the marginal costs of producing the two goods.

Calculate income for bottle division and cologne division : The Alfonso Company has used market-based transfer prices in the past. Calculate the income for the bottle division, the cologne division and the corporation.

Why is a competitive equilibrium on the contract curve : In the Edgeworth production box diagram, what conditions must hold for an allocation to be on the production contract curve? Why is a competitive equilibrium on the contract curve?

User Account

All Pages