An individual's utility function is given by U = 260x₁ + 310x₂ + 5x₁x₂ - 10x² – x² - where x₁ is the amount of leisure measured in hrs/week and x₂ is earned income measured in $/week. Find the values of x₁ and x2 which maximise utility.
Q: What does "*" this mean?
A: Total revenue is the product price and quantity. Total revenue = Price * Quantity = Price ×…
Q: Big Bro manufacturing company purchased a delivery van having a cost of P900 000.00, a life of eight…
A: The annual worth approach refers to the net of all the benefits and costs incurred during a period…
Q: Problem 4 Using the graph below, explain why it would be socially efficient at the MARKET…
A: Consumption of marijuana creates negative externality in the market . When a third party incurs…
Q: During a war, the government puts pressure on producers of military hardware, making their products…
A: Inflation is the increase in the general price level. There are two causes of inflation, i.e.,…
Q: Currency in circulation Checkable deposits Excess Reserves Required Reserves 2000 517 582 1 41 2010…
A: The money supply, also known as M1, is made up of cash, demand deposits, and other liquid deposits…
Q: 3. What happens to the good-market equilibrium output if the following event oc- curs in the…
A: A good market is said to be in equilibrium when the total demand(D) of goods is equal to the total…
Q: A Loader cost Ph 2,115,000 to purchase. Fuel, oil grease, and minor maintenance are estimated to…
A: Introduction The annual value of a property is the sum for which a property is reasonably expected…
Q: If firms are earning positive profits in the long run new firms will enter and drive the market…
A: When talking about the long-run profitability of a firm, it can be said that a firm will earn…
Q: What about calculating 2-6?
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Wen is a typical consumer. Wen spent a total of $10 on 10 pomegranates, $36 on 3 shawarmas, and $35…
A: Price relative is defined as the price of a good or a commodity compared to another good. It can be…
Q: Luxury Mills is a small producer of cashmere yarn, which it sells to clothing manufacturers for…
A: Breakeven point is the point where firm earns only normal profit and normal profit is the amount…
Q: The present worth of a deposit of $1,000 now and $1,000 every six months for 10 years at an interest…
A: The concept of present value states that money today is worth more than it will be in the future. In…
Q: Refer to Figure 17-4. Consider the shift in the short-run Phillips curves shown in the above graph.…
A: Phillips curve shows the relationship between inflation rate and unemployment rate. The curve shows…
Q: Which of these statements does not apply to market economies? a. Prices influence how much of…
A: Free market economies are those in which supply and demand dynamics on the open market determine how…
Q: A firm's output, variable costs, and total costs are given in the table below. Instructions: Round…
A: Total cost is the cost of producing total no. of goods. Total cost is the sum of fixed cost and…
Q: In which of the following situations would a company have a lower chance of losing customers when it…
A: The amount of money that must be spent in order to obtain a certain item is referred to as the price…
Q: 40% on income up to $25,000 30% on income between $25,000 and $34,000 25% on income between $34,000…
A: Tax is imposed by the government to earn revenue for spending in an economy. Taxes can be classified…
Q: How does the increase in interest rates raise the chances of a recession? How can we expect the…
A: The economic growth of a country is dependent on economic stability both within the country and…
Q: What are blocked funds and how does the prospect of potentially blocked funds impact an MNEs…
A: The enterprises that control production and services in at least one country apart from their home…
Q: Which of the following statements about price-takers is false? We do not analyze them using diagrams…
A: An individual or business that must accept market prices because it lacks the market share to do so…
Q: 2. As a Sophomore Student of our Pontifical University, you are being invited to discuss before the…
A: When calculating or projecting the return on an investment, two methodologies can be used: the…
Q: Question 8.A Frank the armadillo and Claire the ant eater consume ants (z) and termites (y). Frank…
A: For Frank - Endowments : (30 ,10 ) Let the price of ant be 'p1' & price of termites be 'p2' .…
Q: pay Based on your yearly income above, calculate the amount of tax each income bracket would under a…
A: A progressive tax refers to the tax rate which increases (or progresses) with the increase in…
Q: (a) Let production be Q(L) = 100 L² - L³ and costs be C(Q) = 250L +600. Show how average costs…
A: a) Show how average costs change as Q rises. Explain why it behaves in the way it does. You can use…
Q: 1. For each of the following scenarios, first determine if the transaction is going to be included…
A: The GDP or Gross Domestic Product in a country can be calculated using different techniques. It…
Q: What are the causes of disfavourable terms of trade in underdeveloped countries?
A: The ratio of the index of export prices to the index of import prices is known as the terms of…
Q: Consider the company that manufactures pens. To make the signature pens, the firm must pay the…
A: Total revenue is the product of price and quantity. Total cost is the sum of total fixed cost and…
Q: The "rational expectations" school of economists, including Robert Lucas and Thomas Sargent, argue…
A: New classical policy ineffectiveness proposition states that Aggregate demand cannot achieve…
Q: What is multiple tax system? Write its merits and demerits
A: Taxation does more than only pay for public goods and services; it also plays a vital part in the…
Q: What are the methods of exchange control?
A: Exchange controls are government-imposed prohibitions and restrictions on private transactions in…
Q: 2. Given the graph below, describe the economy at points A, B, and C. Aggregate Demand (Consumption…
A: The aggregate expenditures within an economy can be calculated using the consumption, government,…
Q: A hair salon offers three services: haircuts, color treatment, and styling. The salon charges $40…
A: Total revenue is the money the businesses make from the sale of all their products combined. It is…
Q: Which of the following best describes average cost regulation of a natural monopoly? O a. It…
A: A natural monopoly is a type of monopoly structure where a single firm is selling the product and…
Q: Y = 1million + 56.43*X + error By how much does the expected value of Y change if X increases by 2…
A: The model exists two variable one is independent variable, and another is dependent variable. The…
Q: A machine costs P7,000, last 8 years and has a salvage value at the end of life of P350. Determine…
A: The term depreciation implies an accounting method utilized to allocate the cost of a tangible or…
Q: As a Sophomore Student of our Pontifical University, you are being invited to discuss before the…
A: As a sophomore student the topics to be discussed before the graduating students of senior high alma…
Q: 7.If a government policy or other external force moves a competitive market away from the…
A: Government intervention is defined as any action made by the government that has an impact on the…
Q: What is global communication?
A: Communication refers to the exchange of thoughts, words, ideas, experiences, and other aspects…
Q: 16. Fill in the missing values in the following table. Income Tax Average tax $ rate (%) S 20,000…
A: A tax refers to the compulsory financial charge or some other type of levy imposed on a taxpayer by…
Q: If the fed orders a contractionary monetary policy, describe what will happen to the following…
A: Contractionary monetary policy is used when central banks raise interest rates while decreasing the…
Q: economic whit out money use this system exhange between 2 people where 2 people each want one good…
A: Barter system is the system where two people each have their good and acquire the other good by…
Q: Q3 In usual, the packing for export consists of three layers.
A: Most important part after manufacturing a good is packaging so that they can be shipped to their…
Q: As a Sophomore Student of our Pontifical University, you are being invited to discuss before the…
A: A cost known as a capitalized cost is an expense that raises the cost of a fixed asset based on a…
Q: Topic: Competing in Tight Oligopolies: Pricing Strategies Required: Please explain the photo…
A: The term "tight oligopoly" refers to a market that is dominated by a small number of very big…
Q: 2.What are the drawbacks (bad things) of having a fixed exchange rate
A: The exchange rate in international trade is referred to as the price at which one country's currency…
Q: What are the benefits of having a fixed exchange rate?
A: Fixed exchange rate system refers to the one in which the value of a currency is pegged with another…
Q: A market where loans are made to borrowers a- Transaction costs b- Fiancial inventory c- Reserves d-…
A: Loans are the money lent by savers to borrowers.
Q: If there were 10 firms in this market, the short-run equilibrium price of rhodium would be would .…
A: The supply curve shows the range of quantities that a producer is willing to provide to the market…
Q: There are times when monetary and fiscal policy contradict each other. O True False QUESTION 17…
A: The macroeconomic tools used by the government to intervene and correct any imbalances in the…
Q: What are the Principles of Public Debt Management?
A: The public debt management involves estimating the government’s debt accurately with proper…
Step by step
Solved in 4 steps with 4 images
- TU = Total Utilityf= is a function ofMU = Marginal UtilityO = units of consumptionA= infinitesimal change EMV= Equimarginal ValueDigital Apps per Period 0 1 2 3 4 5 Total Utility of Digital Apps per Period (utils) which 0 50.0 95.0 135.0 171.5 200.0 Marginal Utility (utils) 50.0 45.0 40.0 36.5 28.5 Marginal Utility Portable per Dollars Spent Power Banks (price = $5.97) per Period | 8.4 7.5 6.7 6.1 4.8 0 1 GTA W N 3 4 5 Total Utility of Portable Power Banks per Period (utils) 0 25 47 65 80 89 Marginal Utility (utils) 25 22 18 15 9 Marginal Utility per Dollars Spent (price = $2.70) 9.3 8.1 6.7 5.6 3.3 Consider the table above. Suppose the consumer's income is $26. Does the consumer spend all of her income if she purchases the optimal quantities of digital apps and portable power banks? The optimum quantity of digital apps purchased is and the optimum quantity of portable power banks purchased is. (Enter your responses as whole numbers.) Spending on digital apps is $ and spending on portable power banks is $. (Enter your responses rounded to one decimal place.) Thus, total spending at the consumer optimum is $ the…Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate the change in consumer surplus from consuming the expensivemeals considering the price change (Hint: you need to compare his optimalconsumption bundle before and after the price change to get the change in CS).Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate for the equivalent variation (EV) for the price change.Elisha is starting a tuxedo rental business and plans to charge $80 for the first day plus an extra $30 for each day beyond the first day. Create an equation for the income Elisha will receive where I stands for total income and D is the amount of extra days.
- Gina is at a toy store and is buying toy T-Rex's (x), which cost på, and toy yaks (y), which cost py. Her income is I. She likes 3 T-Rex's as much as she likes 4 yaks. These toys are perfect substitutes for her.EXERCISE 7 Aisha is considering how to allocate the next 6 hours of her free time. She could choose between leisure (L) and helping her neighbour with the house chores. If she decides to help her neighbour, she is going to get paid at £25 per hour, which she can then spend on her favourite pizza (P). Suppose the price of pizza is £12.50. Aisha's preferences for leisure and pizza are given by the following utility function: U(L, P) = 3L + P. (MU₁ = 3, MUp = 1). a) Write down Aisha's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. b) Calculate Aisha's marginal rate of substitution between leisure and pizza. Explain the concept of MRS and interpret the figure obtained. c) Find Aisha's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. d) Would Aisha's optimal choice change if she could get a discount on her pizza purchases so…What is the trend of the total utility
- True/False Marginal utility refers to the satisfaction or pleasure that occur due to the additional consumption of one more unitDefine Economic utilityAdrienne consumes three goods, x, y, and z. Her consumption preference is given by the utility function: u(x, y, z) = x*y} z#, (Pz-Py, Pz) where x, y, and z are the quantities she consumes (respectively). Let p = be the prices of the goods. Answer the following questions, and justify your answers carefully and mathematically. (a) Last year p = sumption bundle last year. (1, 10, 10) and Adrienne's income was 35. Find her optimal con- (b) This year, the prices of x and z have both risen 3.5% while the price of y has risen 7%, and Adrienne got an income raise of 3%. Find the (approximate) percentage changes of her consumption in the three goods due to these changes in prices and income. Does her raise adequately compensate her for the changed prices? What additional percentage change of her income would be needed if we were to restore Adrienne to last year's exact utility level?