QUESTION 19 Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices double) with a fixed monetary income is equivalent to a decrease of monetary income by a...

Extracted text: QUESTION 19 Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices double) with a fixed monetary income is equivalent to a decrease of monetary income by a factor T (so that the new income is Tm), keeping both prices fixed at their original level O a. T=0.2 O b. T=0.1 OC. T=0.25 O d. T=0.9 O e. T=0.5 QUESTION 20 A firm produces a commodity using Capital (K) and Labor (L). K and L are perfect complements in production. Given current input prices, the firm employs 50 units of L and 50 units of K to produce 2500 units of output. Due to stronger Unions, wages increase by 20%. The firm, however, keeps producing the same level of output after the increase in wages. The new input mix after the increase in wages will be such that: O a. Not enough information to answer O b. Both K and L decrease O. Both K and L remain unchanged O d. K increases and L decreases O e. K decreases and L increases