Consider Alexel, who earns a wage of $15 per hour in the hospitality industry. Recently, Alexel won a lottery ticket which involves $50 of payment each day for 20 years. Alexei's budget constraints and his optimal decisions of and consumption per day before and after the lottery win along with this preference are illustrated in the figure below. Budget 2 32 Hours of free time Choose one correct statement about the figure above OaAs a result of the lottery win, Alexel decides to work more so he can earn even more money each day. Ob. The figure depicts the substitution and income effects of the lottery win Oc Under Budget 1, Alexel would choose point 8 as it gives him the highest level of utility Ⓒd. The lottery win shrinks Alexel's feasible frontier O As a result of the lottery win, Alexel decides to choose more of both free time and consumption Consumption (5) 225 350 * Put

Consider Alexel, who earns a wage of $15 per hour in the hospitality industry. Recently, Alexel won a lottery ticket which involves $50 of payment each day for 20 years. Alexei's budget constraints and his optimal decisions of and consumption per day before and after the lottery win along with this preference are illustrated in the figure below. Budget 2 32 Hours of free time Choose one correct statement about the figure above OaAs a result of the lottery win, Alexel decides to work more so he can earn even more money each day. Ob. The figure depicts the substitution and income effects of the lottery win Oc Under Budget 1, Alexel would choose point 8 as it gives him the highest level of utility Ⓒd. The lottery win shrinks Alexel's feasible frontier O As a result of the lottery win, Alexel decides to choose more of both free time and consumption Consumption (5) 225 350 * Put

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter2: Choice In A World Of Scarcity

Section: Chapter Questions

Problem 19CTQ: Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers...

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Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers rises from 2 to 4. Why is file opportunity cost of bus tickets unchanged? Suppose Alphonsns weekly spending money increases from 10 to 20. How is his budget constraint affected from all three changes? Explain.
Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket whichinvolves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Nowdo the following:• Illustrate the effect of the lottery win on Alexei’s budget constraint using a fully labelleddiagram where i) the horizontal axis represents the hours of free time per week, and ii) thevertical axis represents Alexei’s weekly consumption.• Illustrate on the same diagram Alexei’s optimal decisions before and after the lottery winalong with his indifference curves.
Consider Justin who makes $1,400 per week and just won a ‘set for life’ lottery ticket whichinvolves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Nowdo the following: • Illustrate the effect of the lottery win on Justins budget constraint using a fully labelleddiagram where i) the horizontal axis represents the hours of free time per week, and ii) thevertical axis represents Justins weekly consumption. • Illustrate on the same diagram Justins optimal decisions before and after the lottery winalong with his indifference curves. • Based on your diagram, discuss whether Justin will quit his job.
Consider Laura who makes $1,400 per week and just won a ‘set for life’ lottery ticket which involves a fortnightly payment of $10,000 for 20 years. Currently she works 35 hours per week. Do the following: 1. Illustrate the effect of the lottery win on lauras budget constraint using a fully labelled diagram where i) the horizontal axis represents the hours of free time per week, and ii) the vertical axis represents lauras weekly consumption. 2. Illustrate on the same diagram lauras optimal decisions before and after the lottery win along with his indifference curves. 3. Based on your diagram, discuss whether Laura will quit her job.
Mega Partner is selling two products Marker(m) and Eraser(e) and their budget is given with thefollowing equation: 15Qe+ 30Qm= 3000. Now answer the following questions. I. Draw the budget line for Mega PartnerII. What would be the highest amount spend on Marker with the existing budgetIII. If Total budget increases to 4500 what would be the new budget line (use diagram)IV. If Price of the Marker becomes 15, how this changes the existing budget line keeping allthe values remain same.
The consumer choice is not restricted to the choice of consumptiongoods. In fact, it can apply to all our decisions that involve trade-offs. Suppose Mary has awage per hour of 10 euros. With her earned income she consumes. That isC=wH per day.She also decides how many hours to work of take leisure time each day.H=24-N, whereHis work and N is leisure. Her utility is given by （picture） Solve for the optimal decision of labor/leisure. Plot the budget constraint and the indif-ferent curve. What is the labor supply function?
EXERCISE 1Below is a production possibilities table for consumer goods (Food) and capital goods(Robots):A B C D EFood 0 1 2 3 4Robots 10 9 7 4 01. Show these data graphically. Upon what specific assumptions is this productionpossibilities curve based?2. If the economy is at point C, what is the cost of one more food? Of one morerobot? Explain how the production possibilities curve reflects the law ofincreasing opportunity costs.3. If the economy characterized by this production possibilities table and curvewere producing 3 food and 2 robots, what could you conclude about its use ofavailable resources?4. What would production at a point outside the production possibilities curveindicate? What must occur before the economy can attain such a level ofproduction?EXERCISE 2Explain how (if at all) each of the following affects the location of a country’s productionpossibilities curve:1. The quality of education increases.2. The number of unemployed workers increases.3. A new technique…
Burt from Workouts 4.3hasu = (x + 2)(y + 10),m =110,pX= 20, pY= 5. Next month the prices will be pX= 5, pY= 5. Provide a labelled Indifference Curve and Budget Line Diagram to illustrate and quantify her Hicksian CV and EV for this price change as bundles A, B, C, and D. Compute and show all intercepts. Her CV = __________. Her EV = __________
Anna has endowment 1500 now and 500 later. Internet rate is 2.0%. She prefers smooth consumption to time (i.e., u0=u1=u). a. Assume utility function, u(c)= log c. What are the optimal consumption c0and c1if Anna's beta=1, and she wants to maximize her utility? b. Now assume that the utility function, u(c)=c0.5. If everything else remains the same as Problem 1(a), what are the optimal consumption c0and c1if Anna wants to maximize her utility?
Wherein:TU = Total Utilityf= is a function ofMU = Marginal UtilityO = units of consumptionA= infinitesimal change EMV= Expected Monetary Value
Question 9 | [ max 200 words] Consider Alexei who makes $1,400 per week and just won a ‘set for life’ lottery ticket which involves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Now do the following: • • • Illustrate the effect of the lottery win on Alexei’s budget constraint using a fully labelled diagram where i) the horizontal axis represents the hours of free time per week, and ii) the vertical axis represents Alexei’s weekly consumption. Illustrate on the same diagram Alexei’s optimal decisions before and after the lottery win along with his indifference curves. Based on your diagram, discuss whether Alexei will quit his job.
)ncob buys only milk and cookies.a. In yeor 1, Jocob earns $100, milk costs $2 perqua rt, and cooki es cost S4 per dozen. Ora\"•jacob's budget constraint.b. Now suppose that a ll prices increase by10 percent in yeor 2 ond !hot jacob's salaryincreases by 10 percent as well. Draw jacob'sn<:w budget constraint. How would Jacob'soptimnl combination of milk and cookies in year 2compare to his optimal combination in year 17