ate a table and graphs (a) Suppose we have preferer indifference curve through the bundle X = 30 and Y = 30. (b) The Marginal Rate of Substitution is MRSxy=-2Y/X. For the bundle (X=30 calculate and then interpret what the value of the MRS means.< (c) Cobb-Douglas preferences are strictly convex. What does this imply about the along the indifference curve? Explain/discuss (you may want to draw a picture (d) What are the two conditions (equations) that identify the optimum given these the consumer's budget constraint? Sketch this in a figure and explain.<
Q: The populations of Abu Dhabi (National, Non-National, and Total) and UAE are shown in the following…
A: Here we are given the population data of Abu Dhabi and UAE. And we will use the numbers to calculate…
Q: Refer to Figure 17.1. Economic growth is represented by Group of answer choices a movement from…
A: The goal of economic growth is to increase national income while utilising resources sustainably. It…
Q: Subject: engineering economics A 1,500-bond which will mature in 10 years and with a bond rate of…
A: In this case, bond is discussed here. Bond means a legal paper which is authorized by the public…
Q: A firm produces q with inputs labor L and materials M. The production function is q=50(ML)0.5+M+L…
A: Here we are given the production function. A production function is a function of labor, capital,…
Q: 3. Kroger store decides to run a price promotion for apple pies. Through market research, they…
A: Price elasticity measures the percentage change in quantity due to percentage change in price.…
Q: ...a cut of 50 basis points on the policy rate would assist to contain inflation at its target…
A: INFLATION A broad rise in the cost of goods and services across an economy is referred to as…
Q: For mutually exclusive projects are being considered for a 2 mile jog in track. The life of the…
A: Formula used to calculate the B-C ratio is given below: B-C ratio = PW of benefits / PW of costs…
Q: Refer to Figure 5-2. What happens to total revenue if price falls along part C of the demand curve??…
A: Price elasticity of demand is used by enterprises when they want to adjust their demand elasticity.…
Q: We know that n differentiable functions x₁(p, m), ..., xn(p,m) of prices and income are generated by…
A:
Q: (d) Suppose the probability of a fire rose to 5%. Would the agent buy insurance now? Show your work…
A: Here we are given the situation where payoff are uncertain and we are also given the respective…
Q: How should the situation be rectified to return to full employment
A: When discussing short-term changes in aggregate demand or supply, it can be claimed that these…
Q: Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to…
A: The regression line is at times called the "line of best fit" since the line fits best when drawn…
Q: 2) Now suppose the prices change to q= (91, 92) = (2,1). Again, obtain the optimal choices for A and…
A: If a decision leads to a known or anticipated outcome that is at least as good as all of the other…
Q: What is the equilibrum price and Quantity on the following: a) Demand p = 100-5q, Supply p =…
A: Demand curve refers to the curve which shows various quantities of a good being demanded at…
Q: Effect of Price on Supply of Eggs Suppose the wholesale price of a certain brand of medium-sized…
A: A measure of how responsively the quantity supplied is to changes in a specific commodity's price is…
Q: Green Valley bank currently has Rs 1,000 million in transaction deposits on its balance sheet.…
A:
Q: Arrange the following revenues in the federal government, from greatest to least. (1 being the…
A: Since you have posted multiple questions, as per the Bartleby guidelines we can solve only one…
Q: How is the heterodox/MMT approach different than the Neoclassical/orthodox view of government…
A: Modern Monetary Theory (MMT) is defined as a theory which states that nations that have power or…
Q: The U.S. Department of Agriculture guarantees dairy producers that they will receive at least $1.00…
A: Demand is the inverse relationship between quantity demanded and price of a certain commodity.…
Q: The populations of Abu Dhabi (National, Non-National, and Total) and UAE are shown in the following…
A: Annual growth rate is the percentage increase in the population in the current year over the…
Q: 2. Consider a hypothetical economy with the following properties: Production Function: Y = K0.60…
A: Production Function: Y=K0.4LE0.6 Golden rule: The objective is to maximize consumption per effective…
Q: The aggregate production function is Y = 5KL. If there are 18 units of capital and 50 units of…
A: Production function shows the relationship between the input and output.
Q: Which of the following is NOT an investment in human capital? Group of answer choices Older workers…
A: Human capital considers not only the employees of the company, but also their contributions to the…
Q: he cost of ingredients for a turkey sandwich at The Pit Room is $5, and the daily demand function…
A:
Q: A country will roughly double its GDP in twenty years if its annual growth rate is: Group of answer…
A: Here we will use the future value formula in case of compound rate of interest, which is given as:…
Q: Chapter 9 - Monopoly The table below shows cost data for producing different amounts of cleaning…
A: Marginal revenue refers to change in total revenue with respect to change in output.
Q: Use an aggregate demand and supply diagram to illustrate and explain the following will affect the…
A: In the aggregate demand-aggregate supply model, short-run equilibrium occurs at such a price level…
Q: Nissan is advertising a 24-month lease on the all-electric Leaf for $190 payable at the beginning of…
A: Nissan is advertising a 24-month lease on the all-electric Leaf for $190 payable at the beginning of…
Q: Suppose that the supply and demand schedules for a product are as follows: Price Quantity demanded…
A: The government imposes price limits to protect consumers' interests in the marketplace. These…
Q: Consider a two-product firm under pure competition. With pure competition, the prices of both…
A: Introduction The total cost incurred explicit and implicit expenditure of produced products. Total…
Q: A grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has…
A: According to the equimarginal principle, customers will choose a mix of commodities that maximize…
Q: 2. Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…
A:
Q: a. Based on PW method, Design Z is more economical. . The modified B/C ratio of Design Y is The…
A: Given Design Y Design Z Investment cost $140,000 $275,000 Annual revenue $57,659 $96,354…
Q: 4. Gesky Industrial Products manufactures brushless blowers for boilers, food service equipment,…
A: Introduction An interest rate is the percentage of principal charged by the lender for the use of…
Q: The aggregate production function is Y = 3KL. If there are 20 units of capital and 50 units of…
A: Labour productivity tells us how efficient is labour. How many outputs are produced per unit of…
Q: What are the three main virtues of the market system?
A: A market economy is a form of economic system in which supply and demand, rather than government…
Q: Define positive and negative discounting and give examples of each
A: Interest rates decide whether or not a loan will be returned in whole or in excess of the original…
Q: Pls explain too. A binding and permanent urban growth boundary that does not allow increases in…
A: Price is affected by the demand and supply in the market.
Q: Suppose that annual income from a rental property is expected to start at $1,270 per year and…
A: Initial investment cost =7700 Rate of interest =9% per year Expected rent on the first year =$1270…
Q: Based on what we know about entry and exit into competitive markets, what effect will this…
A: Entry and exit in healthcare industry is difficult because selling medical equipments and medicines…
Q: Real-Time Data Analysis Exercise* *Real-time data provided by Federal Reserve Economic Data (FRED),…
A: Here we are given the M1 and M2 data (which are the alternative measures of money supply) for the…
Q: Explain the Stag Hunt Game as an example of a coordination problem?
A: The analysis of mathematical models of strategic actions among rational actors is what's known as…
Q: The populations of Abu Dhabi (National, Non-National, and Total) and UAE are shown in the following…
A: The formula for average annual population growth rate: AAGR=Pt+n-PtPt×100n Here AAGR = average…
Q: Suppose that at present total currency in the Philippine economy is presently PHP5.5 trillion, total…
A: Given The currency in circulation in the Philippine economy (C) is Php 5.5 trillion. The total…
Q: A consumer is observed choosing the bundle (3, 1) at prices (1, 2) and the bundle (2, 2) at prices…
A: Revealed preference is the preference which the consumer shows after he have purchased products in…
Q: For the last question, can you explain why the answer states grain and not cars? was this an error?
A: Introduction: Opportunity cost refers to the second-best alternative that has been forgone. This…
Q: - 1.7. In Section 1.2.B, we analyzed the Bertrand duopoly model with differentiated products. The…
A: Demand function : qi = a - pi (When pi < pj ) qi = 0 (when pi > pj ) qi = (a-pi )/2…
Q: How the General Systems Theory works in research & development and marketing?
A: idea of general structures is an interdisciplinary ideational framework concentrating at the…
Q: Acquiring a supplier because it becomes more profitable Question 4 options: will raise…
A: Asking price will be influenced by a numerous variables and factors, including the size, location,…
Q: Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good…
A: The goods that have a negative relationship with income are considered inferior. Consumption of…
Step by step
Solved in 2 steps with 1 images
- (a) Suppose we have preferences U(X, Y) = min [X, 3Y]. Graph/sketch the indifference curve through the bundle (X = 30, Y = 30). What is the utility of (30, 30) and explain why the indifference curves look the way they do. (b) What does the Marginal Rate of Substitution tell us about preferences? < (c) Why is the Marginal Rate of Substitution not applicable in this example? < (d) What do we mean by a composite good? What does this composite good look like with these preferences? Show and explain.< (e) State the consumer's maximization problem and express this in words.< (f) Now let Px = 10, Px= 20 and income M = 2000. Find optimal X*, Y*, and the resulting Utility (U*). Show your work. < (g) Now let Py = 15. How does optimal consumption (X*.Y*) and utility (U*) change relative to (e)? Explain in simple terms and show in a diagram.<1. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects to be found below. (b) u(x1, x2) = x1 + x2. (c) u(x1, x2) = x1x2. (d) u(x1,x2) = min {x1,x2). (e) Rank the substitution effects and the income effects found above by their magnitude. To what extent do they conform to your guess?Q1: (I)Asma eats only apples and almonds. Her level of income is $36, Price of apple (Pa) is $2 per kg and price of almond (Pl) is $6 per kg. The preferences of Asma are represented by the following utility function Utility U= 10*Qa + 40*Ql where Qa and Ql are Asam’s consumption of Apples and almonds. (a) which kind of preferences Asma has? (b) Find Utility per dollar spent on apple and almond (c) Find Marginal rate of substitution and interpret it (d) Find utility maximizing values of apples and almond and show graphically
- Give examples by drawing a graph of each of the following. Please draw your graphs neatly using a ruler to draw the axes and label your graphs completely. In each case draw ar least three indiffer- ence curves and indicate clearly the direction of increasing prefer- ence. (i) the preferences being convex but not strictly convex. (ii) the preferences being strictly increasing but not convex.a good is normal, then an increase in the price of the good will lead to which of the following to be true for this good? (Assume that there are only two goods, the individual's preferences lead to well-behaved preferences with strictly convex indifference curves and an interior solution for all budgets). Let SE = substitution effect, IE = income effect) (a) The magnitude of the IE for this good must be larger than the magnitude of the SE (b) The magnitude of the SE for this good must be larger than the magnitude of the IE (c) The good could be a Giffen good d) The good must be an ordinary good ( (e) None of the aboveNumber of Sodas per day Total Utility Marginal Utilit 1 20 35 3 47 12 4 10 Refer to the table, The marginal utility of the second soda per day is L. (Answer should be in the form of numerical characters, e.g. 20) Enter your answer here
- (2) Consider the utility function u(x, y) = Vx+ay. Your budget constraint is P1x+p2y = М. (a) Find the marginal utilities for these goods. (b) Show that these preferences are quasilinicar. (c) Solve the consumer's optimization problem.Donald likes fishing (X1) and hanging out in his hammock (X2). His utility function for these two activities is u(x1, x2) = 3X12X24. (A) Calculate MU1, the marginal utility of fishing. (B) Calculate MU2, the marginal utility of hanging out in his hammock. (C) Calculate MRS, the rate at which he is willing to substitute hanging out in his hammock for fishing. (D)Last week, Donald fished 2 hours a day, and hung out in his hammock 4 hours a day. Using your formula for MRS from (c) find his MRS last week. (E) This week, Donald is fishing eight hours a day, and hanging out in his ham mock two hours a day. Calculate his MRS this week. Has his MRS increased or decreased? Explain why? (F) Is Donald happier or sadder this week compared to last week? Explain.It is common for supermarkets to carry both generic (store-label) and brand-name (producer-label) varieties of sugar and other products. Many consumers view these products as perfect substitutes, meaning that consumers are always willing to substitute a constant proportion of the store brand for the producer brand. Consider a consumer who is always willing to substitute 4 pounds of a generic store brand for 2 pounds of a brand-name sugar. Do these preferences exhibit a diminishing marginal rate of substitution? Assume that this consumer has $24 of income to spend on sugar, and the price of store-brand sugar is $1 per pound and the price of producer-brand sugar is $3 per pound. How much of each type of sugar will be purchased? How would your answer change if the price of store-brand sugar was $2 per pound and the price of producer-brand sugar was $3 per pound?
- 4 Part Question on Caesar * * PART 1 * * Caesar has preferences that are described by the utility function u = 3x 1 + 5x 2. Caesar strictly prefers the bundle (x 1, x 2) = (0, 6.6) to the bundle A. (3, 3) B. (5, 3.6) C. (0, 8.4) D. (11, 1.8) E. (8, 3.60) * * PART 2 * * What is the functional form of Caesar’s preferences, or indifference curves? A. Linear (perfect substitutes) B. Leontief (perfect complements) C. Satiation D. Concave, but not strictly concave E. Cobb-Douglas * * PART 3 * * Caesar’s preferences are A. strictly convex. B. definitely not well-behaved. C. definitely well-behaved. D. strictly concave. E. neutral. * * PART 4 * * Caesar has been consuming the bundle (x 1, x 2) = (10, 2.4). At this point, what is the marginal rate of substitution? A. – 0.25 B. –0.6 C. – 1.67 D. – 3.0 E. – 5.0.A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility yielded by their consumption is shown in the table below. Assume that the prices of X, Y, and Z are $10, $2, and $8, respectively, and that the consumer has an income of $74 to spend. (a) Complete the following table by computing the marginal utility per dollar for successive units of X, Y, and Z to one or two decimal places. (b) How many units of X, Y, and Z will the consumer buy when maximizing utility and spending all income? Show this result using the utility maximization formula. (c) Why would the consumer not be maximizing utility by purchasing 2 units of X, 4 units of Y, and 1 unit of Z? Product X Product Y Quantity Utility Marginal Quantity Utility Marginal Utility Utility per$ per$ 1 23 4567 42 82 118 148 170 182 182 1 23 4 5 6 7 14 26 36 44 50 54 56.4 Product Z Quantity Utility Marginal Utility per$ 1 23456 7 32 60 84 100 110 116 120 3..Ice cream and cakes are perfect substitutes for a child, and 2 units of ice cream is always worth 3 units of cakes (however many ice creams or cakes she might have, she would be willing to give up 2 ice creams to get 3 more cakes to keep the same utility level) . (a) Write down a utility function u(x,y) that represents the child's preferences, where x is the number of ice creams and y is the number of cakes she has. (b) If the prices are px= 8 and py =5, and she has $140 to spend on the two goods this summer, what is her optimal bundle? (c) If the price of ice creams decreases slightly, down to px = 7, what happens to her optimal bundle in this case? Did it change "slightly" compared to (b)?