= Aisha (A) and Baasim (B) want to share a pizza of size 1. Suppose that Aisha derives utility uA (x): √x from x amount of pizza and Baasim derives utility uß(x) = √√x from x amount of pizza. Aisha discounts with 8A = 2/3 and Baasim discounts with 8B = 1/3. Aisha moves first. (a) Calculate the Rubinstein solution to the bargaining problem. Explain each step in your calculations.
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- Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should: a. Reallocate spending from magazines to newspapers. b. Reallocate spending from newspapers to magazines. c. Be satisfied because he is already maximizing his total utility. d. None of the aboveRick thinks either Morty or Summer broke his TV. Morty and Summer each have to decide simultaneously whether to take the blame or blame the other person. If they both blame the same person (both blame Morty or both blame Summer), the person they blame gets a small punishment and utility of -2, while the blameless person gets a utility of 0. Otherwise (if they both blame the other or both blame themselves), they both get a more severe punishment and a utility of -10. a.Draw the normal (matrix) form of this game, with Morty choosing the row and Summer choosing the column. Does either Morty or Summer have a dominant strategy? Explain your answer. Note: only Morty and Summer are players in this Game. Rick designed the game and is not a player. b.Find all Nash equilibria of this game. c.Suppose instead there are three suspects: Morty, Summer, and Jerry. Otherwise, the rules are the same as before. Draw the normal (matrix) form of the game. d.Find all Nash equilibria of the three-player…
- Rick thinks either Morty or Summer broke his TV. Morty and Summer each have to decide simultaneously whether to take the blame or blame the other person. If they both blame the same person (both blame Morty or both blame Summer), the person they blame gets a small punishment and utility of -2, while the blameless person gets a utility of 0. Otherwise (if they both blame the other or both blame themselves), they both get a more severe punishment and a utility of -10.a. Draw the normal (matrix) form of this game, with Morty choosing the row and Summer choosing the column. Does either Morty or Summer have a dominant strategy? Explain your answer. Note: only Morty and Summerare players in this Game. Rick designed the game and is not a player. b. Find all Nash equilibria of this game. c. Suppose instead there are three suspects: Morty, Summer, and Jerry. Otherwise, the rules are the same as before. Draw the normal (matrix) form of the game. Hint: draw three matrices, with Morty choosing the…You have the Cobb-Douglas utility function u(x,y) = xy over apples (x) and plums (y) and you have $120 budget to spend and can carry at most 480 ounces in weight in your backpack going back to the dorm. Each apple costs $1 and weighs 8 ounces, and each plum costs $3 and weighs 4 ounces. You can only leave the store with a bundle of fruits you can afford and carry. (a) Drawing the relevant lines, intercepts, marking the points and hence identifying the feasible set of bundles, calculate the optimal bundle. (b) Forget about (a). If you were to choose a backpack before going on this shopping trip, for the weight constraint not to be an issue for you, how many ounces of weight capacity would you need for your backpack? HINT: That is, for this weight capacity of the backpack, you’d be able to carry the best bundle you can afford, i.e, the weight constraint is not binding for your decision. ( c) Forget about (b). In (a), just before going out for shopping with your backpack to buy the…Which of the FF. statements is correct regarding the preference of the consumers when the income of the consumer can only be spent between apples and oranges? Assume that apples are written on the vertical axis while oranges are written on the horizontal axis A. when the consumer has few oranges, he is willing to trade more apple to get another orange B. when the consumer has so many oranges already, he will only exchange less apples for an orange C. the declining slope of the indifference curve shows the marginal value of oranges is declining D. all are correct E. none is correct
- Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products G and H. Units of G MUG Units of H MUH 1 36 1 70 2 33 2 60 3 27 3 55 4 21 4 45 5 18 5 30 6 12 6 25 7 6 7 15 If the consumer has a budget of $29 and the prices of G and H are $3 and $5, respectively, the consumer will maximize their utility by purchasing Multiple Choice 3 units of G and 4 units of H. 4 units of G and 2 units of H. 1 units of G and 5 units of H. 2 units of G and 5 units of H.CAN YOU ANSWER PART 4 (iv) PLEASE?? Suppose you have preferences for pizza (z) and soda (d). The price of pizza, pz = 5.00 and the price of soda,pd = 2.00. You have an income of I = 20 that you can spend on pizza and soda every week. Suppose you are equally happy consuming either 3 pieces of pizzas or 2 cups of soda.•(i) What type of preference do you have for pizzas and sodas?•(ii) Derive the utility function for pizza and sodas•(iii) Solve for your optimal consumption of pizza and sodas•(iv) Illustrate your answer to (iii) on a graph, include your indifference curve, the budget constraint,the slope of the budget constraint, and all labels.The table below represents how Marco feels about chocolate candy bars. a. Fill in the missing values for total utility and marginal utility. Instructions: Enter your answers as a whole number Chocolate Candy Bars and Marc's Utility Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils) 0 0 - 1 26 ______ 2 ____ 18 3 57 _____ 4 ____ _____ 5 71 5 6 ____ 0 Suppose Marco…