Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are $18, $6, $4, and $24, respectively, and that Ricardo has an income of $105. Column 1 Column 2 Column 3 Column 4 Units Units Units Units of A MU of B MU of C MU of D MU 1 72 1 24 1 15 1 36 2 54 15 2 12 2 30 3 45 12 3 8 3 24 4 36 4 9 4 7 4 18 5 27 7 5 5 13 18 6. 6 4 6 7 7 15 7 2 7 3.5 7 4 8 12 8 1 8 3 8 2
Q: The maximum carrying capacity of a park is 100 animals. Currently, there are 10 animals in the park....
A:
Q: Question 4 A "deterioration of lending practices" occurs when: O lenders require larger down payment...
A: When borrowers are subjected to unfair, deceptive, or abusive loan terms, "predatory lending" is use...
Q: Price 38 Supply 34 28 22 16 Demand 10 6 4 5 10 20 30 50 60 70 80 90 Quantity 40 2.
A: When the world price is less than the equilibrium price, then the domestic demand will be higher tha...
Q: e in this western province passes laws that make it easy for workers to join a union. Through collec...
A: Equilibrium is achieved at the level where Ls equals Ld
Q: A garden shop determines the demand function q = = D(p) = 4p+1000 %3D during early summer for 40p+26...
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a...
Q: Which is NOT needed for the Fed to design and implement effective monetary policy to reduce the seve...
A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...
Q: What type of economists believe that markets naturally self-correct, and will reward good strategies...
A: The fundamental theory of Classical economy is that the economy has the ability to eliminate (or sel...
Q: A firm has 60,000 shares whose current price is $62.57. These shareholders expect a return of 14%. T...
A: Total shares = 60,000 Price of share = $62.57 Return = 14% The firm has a 3-year loan of $1,900,000 ...
Q: Does Smith think these new low skill jobs created by the Industrial Revolution will be good for soci...
A: Smith believes that the Industrial Revolution's introduction of low-skilled occupations will benefit...
Q: Consumer Price Index Year Index 2XXX 66.0 3XXX 64.6 4XXX 64.6 5XXX 65.3 6XXX 66.4 7XXX 6...
A: Given: Consumer Price Index Year Index 2XXX 66.0 3XXX 64.6 4XXX 64.6 5XXX 65.3 ...
Q: following graph, show the effect the good weather season in Ontario has on the market for raspberrie...
A: Equilibrium is achieved at the output level where Ls equals Ld
Q: Use the previous graph to complete the first row of the following table by indicating the quantity o...
A: Given: Equilibrium price=$ 500 Equilibrium quantity=$250 million tonnes per month
Q: Q Search this Homework (Ch 10) Supply Demand Supply Demand QUANTITY (Units) than the With this type ...
A: The correct answer is given in the second step.
Q: Two In the market for sugar, there has been a discovery of a new technology for more production of t...
A: As a result of the acquisition of new technology for further production of goods, supply is increasi...
Q: Question 7 The fact that in the USA, a municipal bond could have a lower yield compared to federal g...
A: Municipal bonds are issued by municipal corporations.
Q: What are the official measures of money? Item Sbillions Are all the measures really money? Non-chequ...
A: An official measure of money refers to measures of money that determines the level of money supply i...
Q: t prices to cover the higher costs associated with the new stadium. If the Oilers are prof costs fro...
A: Pricing strategies are the technique involved by the sellers to lay out best cost for their item or ...
Q: the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Exp...
A: In a perfectly competitive market there are large number of firms producing similar and identical pr...
Q: In the long run of the AD/AS model, ... a. Real GDP is determined by AD and the price level by Y*. O...
A: Over the long run, economy operates at the full employments level or output corresponds to the full ...
Q: Suppose you are interested in studying the effect of education on wages (controlling for IQ and pare...
A: wagei=β0+β1educi+β2IQi+β3ParInci+∈i Education (educ) = in years Weekly wages (wage) = in $ Intellige...
Q: 7. The following table shows the demand for water and cost conditions for the New South Springdale W...
A: a) quantity in gallons price per gallon ($) total revenue($) marginal revenue($) marginal costs($...
Q: Compute the expected return given these three economic states, their likelihoods, and the potential ...
A: Answer: Given, Economic state Probability Return (%) Fast growth 0.3 40 Slow growth 0.4 10 ...
Q: The following is information for a perfectly price discriminating monopolist. Demand: P = 87 - 0.021...
A: Equilibrium quantity can be determined when; Price(P) = Marginal cost(MC)
Q: One function of the Bank of Canada is... O a. Acting as the lender of last resort for the largest pr...
A: "Bank of Canada is Canada's central bank and a central bank provides financial and banking services ...
Q: Classical economists believe that... a. The economy is composed of the real sector and the monetary ...
A: Classical economist' primary premise is that markets function effectively and provide the best macro...
Q: Adam Smith optimistic or pessimistic about the effect on society of the
A: The Industrial Revolution was the change to new assembling processes in Great Britain, mainland Euro...
Q: An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given...
A: Given, the demand curve is P = 125 - Q and the marginal revenue curve is MR = 125 - 2Q. Profit maxim...
Q: The fact that in the USA, a municipal bond could have a lower yield compared to federal government b...
A: In the United States, different interest rates are associated with different types of bonds such as ...
Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300 G...
A: Disposable income = Y-T [a] C = 400 + (8/9)*DI I = 300 G = 800 T = (1/2)*Y (X-M) = 0 Y = C + I + G +...
Q: a duopoly faces an inverse market demand of: p= 330 – 391 - 3q2. ou are told that firm 1 is the lead...
A: In the stackelberg Model, leader firm produces more than the follower.
Q: Suppose you have an exponential utility function given by U(x) =1 - exp(-x/R) where, for you, R = 10...
A: The quantity of assets that makes a person hesitant to gamble/invest or refrain from participating i...
Q: If desired investment spending is relatively sensitive to changes in interest rates, then in reducin...
A: If desired investment spending is relatively sensitive to changes in interest rates, then changes in...
Q: In a perfectly competitive market, the market price is $2, and firms are producing 100 units. At a q...
A: "In a perfectly competitive market if the market price is below the minimum of the average variable ...
Q: If a perfectly competitive market is in long-run equilibrium, then the market is: productively ef...
A: Perfect competitive firm is the one which contains a lot of sellers, each of which sells the same pr...
Q: Assume both firm 1 and firm 2 are in the market and act as oligopolists. Assume furthermore that the...
A: In Bertrand competition, firms charges price of its product simultaneously.
Q: passage Drag word(s) below to fill in the blank(s) in the passage. Improving enables a country to ha...
A: The term human capital refers to the economic value of a worker's experience and skills. Human capit...
Q: Be the production function Q (K, L)) = (K} +213), that depends on the quantities Used from inputs Ka...
A: Given production function Q=89K13 +2L133
Q: Bank West's Balance Sheet Assets Cash $500 Deposits at Bank of Canada $700 Loans and Mortgages $1980...
A: The reserve ratio is the percentage of reservable liabilities that commercial banks must hold rather...
Q: Some years ago, a new brand of toothpaste was introduced in the United States. According to its adve...
A: The sum/addition of all the values in a set is divided by the total number of values in the set to g...
Q: I can't find anything to back up that a decrease in aggregate demand causes cost push inflation. My ...
A: Answer: Cost-push inflation: cost-push inflation is caused by an increase in the cost of wages and r...
Q: The adjustment process for an economy experiencing an inflationary gap involves wages, unit costs an...
A: In the above diagram, an increase in the government purchase leads to a rise in the aggregate demand...
Q: Consider the same Stackelberg game with three firms as described by the previous question. Firm 1 ch...
A: In a Stackelberg competition with n number of firms, one firm acts as the leader with the remainder ...
Q: During calamities, such as typhoons, fires, or the ongoing pandemic, the government provides assista...
A: A budget line depicts the combinations of two commodities that a consumer can consume given a budget...
Q: 6789 Based on the table, what is total revenue for John's Tricycle Company if it produces at its pro...
A: Marginal revenue is the total change in TR due to a unit change in output . MR = TR(n) - TR( n-1)
Q: Suppose that nominal GDP was $12 trillion in 2040 in Bedrock. In 2050, nominal GDP was $15 trillion...
A: Economic growth is defined as an increase in the production of economic goods and services from one ...
Q: of the domestic Ceteris paribus, an increase in the domestic money supply leads to currency, thereby...
A: The total volume of money that is being held by the public at a specified point of time in an econom...
Q: (20 points) Complete the following table: Quantity of Labor Total Output Marginal Product Average Pr...
A: Formulas: 1. Marginal output at n unit = Total output at n unit - Total output at n-1 unit 2. Averag...
Q: Question 21.21. Which would be an implicit cost for a firm? The cost of worker wages and salaries fo...
A: We know that Implicit cost is the cost that represents the opportunity cost of consuming resources w...
Q: L consists of M2 plus all other products that may be transferred into money. Lis the most liquid cat...
A: One definition of a liquid asset is readily convertible into money. Cash is the most significant kin...
Q: 5- a) There are 3 firms competing over quantities. The market share of firm 1 is 0.3 and its margina...
A: PLEASE FIND THE ANSWER BELOW.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are $18, $6, $4, and $24, respectively, and that Ricardo has an income of $105. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? How many dollars will Ricardo choose to save? Check your answers by substituting them into the algebraic statement of the utility‑maximizing rule. In other words, show it works when using this rule.Suppose you have a monthly income of $1000, $850 in monthly expenses, and you can put money in a savings account that yields a monthly interest rate of 4%. Now suppose you have an opportunity to invest your money at a 12% return. Further suppose you are able to borrow at 3%. Assuming you invest all of your money and then borrow against your future payout, show your trade-off between present and future consumption. If you still need to consume $850 in the present, how much will you have to spend in the future?
- Tom's income is 32. He consumes a single consumption good, C, which has a price of 2. His utility function depends on his marital status: when happily married, his utility is given byU=C^(1/2) When he is not married, his utility is given by U=0.5C^(1/2) a. Suppose that Tom is not currently married. What is his utility? Now suppose that Tom gets married.What is his utility? Assume Tom can spend all his income on his own consumption when he is married. b. Use compensating variation (CV) and equivalent variation (EV) to calculate the value of marriage to Tom. How do the two figures compare?2. Mr. A has the following utility function and budget constraints: Max 0.1Ln(C1) + 0.7Ln(C2) Subject to S1 + C1 = 100 C2 + S2 = (1 + r)S1 where C1 and C2 are consumption level at young and that at old respectively. Likewise, S1 and S2 are saving at young and saving at old respectively. a) Find out Mr. A’s optimal consumption levels (i.e. C1*, C2*) and optimal savings (i.e. S1*, S2*) in terms of interest rate r. b) Show clearly the results in part a) in a suitable diagram (with C1 as x-axis and C2 as y-axis). c) Is Mr. A a saver ? or a borrower ? d) If r is equal to 0 (i.e. saving gives no returns), will Mr. A still choose to save when he is young (i.e. is S1 still bigger than 0) ? Why ? e) Suppose that Mr. A is not allowed to save (i.e. S1 = 0). What are his optimal consumption levels ? Show his optimal consumption levels in the same diagram you prepare for part a) (with a suitable indifference curve). f) If r increases,…1. Someone is willing to maximize his/her utility. Assume he/she knows his/her u(x,y) =x^0,5y^0,5 (Cobb-Douglas) (a) Find his/her optimal consumption given the income = 20, Px=2, Py=4! (b) Depict his/her optimal consumption graph! 2. Suppose that x and y (from your answer in number 1) are now perfect complement with u(x,y) = min(x,y). (a) Find his/her optimal consumption (given the same income and prices)! (b) Depict his/her optimal consumption graph!
- Let MUA = z = 10 − x and MUB = z = 21 − 2y, where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and B—that is, x + y = 10. How is the $10 best allocated between A and B? How much utility will the marginal dollar yield?Assume Marco is initially borrowing and investing 100, with a return on investment of 50% and an interest rate on borrowing at 10%. The return on investment falls to 5%. Which statements are correct? Select one or more: A. Marco’s decision to continue to invest will depend on his preference between consumption today and consumption in the future. B. Marco will wish to invest and borrow, but he will be worse off than when the return to investment was 50%. C. If he continues to invest and borrow, the dashed line representing his new frontier will start at 105 on the y axis and be shallower than the solid red line, so he’ll continue to invest and borrow D. In the remaining questions, assume the central bank now cuts interest rates so that the real interest rate falls to zero. Marco will still not wish to invest and borrow. E. If he just invests his money in the bank instead, his frontier will cross the x axis at 100 and be steeper than the frontier if he invests.…Calculate the optimal consumption bundles for the following scenarios: (a) U(x,y) = x+47y-3y2.Income is $107. The price of x is $1 and the price of y is $23. (b) U(x,y) = 3x2 + 6y2. Thepriceofxis$5, thepriceofyis$11, and the income is $49. solve by maximizing and using derivatives for utility function
- 5. Suppose interest rates are zero and the consumer's utility is u(c_{1}, c_{2}) = (c_{1}, c_{2}) while the two incomes are (y_{1}, y_{2}) = (75, 125) . Find the optimal consumption in each period , and also indicate what financial transactions the consumer makes . Show the answers on a diagram .Assume that someone has inherited 2,000 bottles of wine from a rich uncle. He or she intends to drink these bottles over the next 40 years. Suppose that this person’s utility function for wine is given by u(c(t)) = (c(t))0.5, where c(t) is each instant t consumption of bottles. Assume also this person discounts future consumption at the rate δ = 0.05. Hence this person’s goal is to maximize 0ʃ40 e–0.05tu(c(t))dt = 0ʃ40 e–0.05t(c(t))0.5dt. Let x(t) represent the number of bottle of wine remaining at time t, constrained by x(0) = 2,000, x(40) = 0 and dx(t)/dt = – c(t): the stock of remaining bottles at each instant t is decreased by the consumption of bottles at instant t. The current value Hamiltonian expression yields: H = e–0.05t(c(t))0.5 + λ(– c(t)) + x(t)(dλ/dt). This person’s wine consumption decreases at a continuous rate of ??? percent per year. The number of bottles being consumed in the 30th year is approximately ???A consumer has utility u(x,y,z)= ln(x) + 2ln(y) + 3ln(z) over the three goods, x,y and z and pZ = 1 . Optimally sheconsumes 30 units of z. What is her income? How much money does she spend on x?(HINT: MUX =??, MUY =??, MUZ =??and remember the “equivalent bang for the buck” condition)(b) Forget about (a). Suppose you have t = 29 hours in total to spend on 3 projects X, Y and Z to make some money.If you spend x hours on project X, you make 2√? dollars;If you spend y hours on project Y, you make ?√? dollars;If you spend z hours on project Z, you make ?√? dollars;Writing down your “utility function” u(x,y,z) and the constraint, solve the utility maximization problem; what isthe optimal amount of time to spend on x ? on y? on z ?