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Consider a two-city (A and B) regional economy where each city operates on the negatively sloped portion of its utility curve. In the initial equilibrium, the two cities are identical. Then air pollution (lead emissions) in city B decreases the brain power and productivity of workers in the city by 20 percent. Illustrate the effects of lead emissions on the regional equilibrium, indicating the direction of changes in city size (the number of workers) and regional utility.
The curve of urban utility shows worker utility as being a function of the number of workers.
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- The diagram below represents a 3-consumer economy, revealing each individual's demand curve (D1, D2, and D3). Using the 3 individual demand curves, construct/draw the market demand curve. [Options for submission: 1) take a screenshot of the figure, copy/paste into Word, and use the drawing tool to draw the market demand curve or 2) recreate the diagram on your own paper (careful to correctly label all intercepts and curves) and draw the market demand with a different color pen(s)] --> upload your image into this question before submission Please show in the picture how to identify. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.a) Consider a couple whose behaviour follows the unitary household model. Their preferences can be represented by the utility function: U(CM; CH) = min (CM, CH), where CM, denotes market goods and CH denotes home production. Each spouse can work up to 50 hours per week, and those 50 hours can be divided between market work and home production. Joe and Anna are each paid £20 per hour for market work. Joe produces £20 of home production per hour, while Anna produces £30 per hour of home production. How many hours are each of the spouses allocating to home production and market work? b) Suppose that Anna is offered a pay raise, so that her hourly market wage increases to £25, and nothing else changes. Will that change the identity of the spouse who works more hours on the market? Explain your answer. [Hint there is no need to calculate the full solution to this case]Two goods are produced in a two-person economy - good X and good Y. Person A's production possibilities frontier is given by the formula X+Y=A, while Person B's production possibilities frontier is 2X+Y=B (where A, B > 0 and A< B < 2A). The utility function of this two-person society is described by the formula U(X,Y)= XY2. The optimal consumption level in this economy is: a. X = A+B and Y = 3 2A+B and Y = and Y = X = b. X = C. X 6 2A+B 6 A+B 3 = 2(A+B) or 3 2(2A+B) 3 2(2A+B) 3 2(A+B) 3 and Y = d. With such data it is not possible to unambiguously determine the consumption level. X
- Consider a small closed economy with two consumption goods: good 1 (meat) and good 2 (berries). There are two types of agents, h and g, and they have the same preferences over consumption, represented by the utility function: u(x1, 22) = In r1 + In #2. However, there are twice as many type-h agents as type-g agents. The only factors of production are their labour. When a type-h agent chooses to spend a fraction a of his day producing meat and the rest producing berries then his output is (yf, y ) = (2a, 2(1 – a)). A type-g agent is more productive. When she chooses to spend a fraction B of her day producing meat and the rest producing berries then her output is (v7, y2) = (38, 12(1 – B)). Which of the following statements is correct? a. Given equilibrium price p, each agent of type h demands one unit of good 1 (meat) and p units of good 2 (berries). Each agent of type g demands 6/p units of good 1 (meat) and 6 units of good 2 (berries). O b. Given equilibrium price p, each agent of…The utility possibility frontier is defined as the set of maximum utility levels for all consumers that is feasible in the economy, given resource constraints and preferences. For a two-consumer economy, it is defined formally as the solution to: u (ūB) = max u A (xA) subject to ug(xB) > ūg and (xA, XB)feasible. For each of the economies above, find an equation for the utility possibilities frontier, and graph it.Consider a couple whose behaviour follows the unitary household model. Their preferences can be represented by the utility function: U(CM; CH) = min (CM, CH), where CM, denotes market goods and CH denotes home production. Each spouse can work up to 50 hours per week, and those 50 hours can be divided between market work and home production. Joe and Anna are each paid £20 per hour for market work. Joe produces £20 of home production per hour, while Anna produces £30 per hour of home production. (a)How many hours are each of the spouses allocating to home production and market work? and Suppose that Anna is offered a pay raise, so that her hourly market wage increases to £25, and nothing else changes. Will that change the identity of the spouse who works more hours on the market? Explain your answer.
- Consider a small closed economy with two consumption goods: good 1 (meat) and good 2 (berries). There are two types of agents, h and g, and they have the same preferences over consumption, represented by the utility function: u(x1, x2) = In ¤1 + In x2. However, there are twice as many type-h agents as type-g agents. The only factors of production are their labour. When a type-h agent chooses to spend a fraction a of his day producing meat and the rest producing berries then his output is (yf, y½) = (2a, 2(1 – a)). A type-g agent is more productive. When she chooses to spend a fraction B of her day producing meat and the rest producing berries then her output is (y7, vž) = (38, 12(1 – B)). The hunter-gatherers now have the possibility of opening up their economy to free trade. In world markets, 1 unit of meat can be exchanged for 2 units of berries, and the country would be a price-taker. Which of the following statements is correct? O a. Only agents of type g benefit from free trade. O…Remy and Emile consume only blueberries (x,) and raspberries (x,). Remy has utility function UR = x (x5)² and Emile has utility function UE = (xf)²x. Remy is endowed with 5 blueberries and 5 raspberries and Emile is endowed with 10 blueberries and 10 raspberries. (a) Derive the equation of the contract curve, i.e., find x%(xf). (b) Set x2 as the numeraire, i.e., assume p, = p and p2 = 1. Find the competitive equilibrium – the equilibrium price ratio, P1/P2, and the equilibrium allocation, ((xf, x5), (xf,x£ )).Suppose the National Football League (NFL) wants to make Super Bowl tickets affordable for more football fans. The league therefore sets the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People who have tickets, however, can turn resell them online for $2,500 each, or more. If there are no transaction costs associated with online sales of Super Bowl tickets, the true cost to a fan of attending the Super Bowl is: O at least $2,500. O the monetary price paid to obtain the ticket. at most $500. $2,000 less than the opportunity cost of a ticket.
- Suppose the National Football League (NFL) wants to make Super Bowl tickets affordable for more football fans. The league therefore sets the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People who have tickets, however, can turn resell them online for $2,500 each, or more. If there are no transaction costs associated with online sales of Super Bowl tickets, the true cost to a fan of attending the Super Bowl is:= 5. Consider an economy with a single (representative) agent with utility function u(x, lc) = x¹/514/5 and an endowment of 0 units of x and 10 units of time, which the agent can use as leisure (c) or labor (L) (i.e., L + lc = 10). The agent owns a firm that produces good x using L as an input, with technology of production given by x(L) = 3√L. Let the price of x be p = 1 and let w denote the price of time (i.e., the price of leisure and the wage). Find the competitive price of time w and the competitive allocation.Suppose that Boris is a price taker and the price for each concert is $35. For Boris to maximise his total net benefit (total benefit – total cost), how many concerts will he attend? Draw Boris' individual demand curve to help you find the answer. Note: if Boris is indifferent between attending and not attending a concert, please assume that he attends it to break the tie. The optimal number of concerts that Boris will attend is: