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- Quantity of D 10 8 N 0 to 2 000 Refer to the budget line shown in the diagram. The absolute value of the slope of the budget line is Multiple Choice 4 6 8 10 Quantity of C two. one-half. five. ten. 20 10,981 AUG 22 < Prev 7 of 12 átv (@. On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according to thefunctionU (c, b) = 20c - c2 +18b- 3b2.How many cigars and glasses of brandy does he consume during an evening? (Cost is no objectto J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum of glasses ofbrandy and cigars consumed to 5. How many glasses of brandy and cigars will he consumeunder these circumstances?Mathemeticaly prove that slope of budget line is -P1/P2
- Consider the relationship y = f(x). In this relationship: %3D Oa. y is called the independent variable and x is called the dependent variable. O b. y is called the range and x is called the domain. O c. yis called the dependent variable and x is called the independent variable. O d. y is called the domain and x is called the range.On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according tothe functionU(c, b) = 20c− c²+ 18b − 3b²a. How many cigars and glasses of brandy does he consume during an evening? (Cost isno object to J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum ofglasses of brandy and cigars consumed to 5. How many glasses of brandy and cigarswill he consume under these circumstances?Consider an economy with two goods, consumption c and leisure 1, and a representative consumer. The consumer is endowed with 24 hours of time in a day. A consumer's daily leisure hours are equal to 1 = 24-h where h is the number of hours a day the consumer chooses to work. The price of consumption p is equal to 1 and the consumer's hourly wage is w. The consumer faces an ad valorem tax on their earnings of 7 percent. The con- sumer also receives some exogenous income Y that does not depend on how many hours she works (e.g. an inheritance). The consumer's preferences over consumption and hours of work can be represented by the utility function U(c, h) = c-3h¹+, where 3 > 0 and p > 0 are parameters. 1+p
- The value in Y axis has changed from 13.54 to 11.78 and the value in X axis has changed from 9.96 to 4.14, what is the slope of the indifference curve at this point? a. 0.30 b. -3.31 c. -8.01 d. 11.22In the derivation of AVC, to find its minimum, you need Multiple Choice O O the minimum-slope ray out of the origin to the TC. the minimum-slope ray out of the origin to the A. the minimum-slope ray out of the origin to the TVC. the flattest slope on the TC.Task 5: Consumption as young and consumption as old Now suppose Mary is thinking about her retirement and wants to understand how much to save. Today she can either con- sume or save for retirement. During her young, working life she will make 100.000 euros. Thus, her current budget constraint is Cy + S = 100.000. In her retirement she has no income, only the amount she saved as young. She can save at a rate of (1+r). So, her budget constraint as old is Co = (1+r)S. (a) Write Mary's lifetime budget constraint as plot it in a graph. Tip: Solve for savings while old and substitute in the young budget constraint. (b) Mary's utility from consumption as young and consumption as old is U(Cy,Co) = 1-0 Solve Mary's maximization problem. What is the MRS and the MRT? (c) Suppose Mary wins the lottery while young. What is the effect on her optimal decision for consumption as young and as old? (d) The local bank decided to increase the interest rate on savings. Discuss the effect of this increase…