Q: Suppose the economy has 100 units each of goods X and Y and the utility functions of the (only) 2 in...
A: The initial endowments are not effcient and improvement is possible as explained below.
Q: A company is evaluating four appliances to choose the best from an economic point of view. The usefu...
A: Given MARR = 15 % time of each appliance = 10 years
Q: If a consumer is maximizing her total utility by consuming good A and good B, what must her marqinal...
A: In consumer theory the consumer's utility is maximized given the budget constraint with the followin...
Q: A firm in a perfectly competitive industry is currently producing 1,400 units per day at a total cos...
A: "According to the guidelines, solution is provided to the first three sub-parts:" a) "Average total ...
Q: In the following scenarios, you will be given a product and an event. Determine what will happen to ...
A: NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...
Q: Country A and country B both have the production function ...
A: Production function in both countries : Y= F(K,L)= K 1/2 L 1/2 Converting this PF into per capit...
Q: What is the meaning of minimum efficient scale? a. The minimum plant size where constant returns to ...
A: Minimum efficient scale refers to the smallest output that a firm is able to produce when long run c...
Q: JA) term given to a fall in a company's stock price. B) name given to how accountants calculate the ...
A: Economic depreciation is a measure of an asset's market value depreciating over time as a result of ...
Q: The tax cuts of 2017 increased the 2018 disposable income of households by roughly $200 billion. If ...
A: Disposable income: Disposable income is also known as disposable personal income (DPI), is the amoun...
Q: should the federal government raise the minimum wage? Explain
A: Increasing the minimum wage would also boost consumer spending, boost company profits, and help the ...
Q: What are the determinants of aggregate demand? How do these determinants differ from the determinant...
A: In economics, aggregate expenditure (AE) is a measure of public pay. Aggregate expenditure is charac...
Q: Eyeglasslux is a single-price monopolist in the eye-glass frame market. It faces a Market demand giv...
A: In the monopoly Market optimal quantity is determined by that point where Marginal revenue is equal ...
Q: In the Heckscher-Ohlin-Vanek model, labour productivities in the production of a good in the differe...
A: Heckscher-Ohlin-Vanek model The Heckscher-Ohlin model was created to forecast international trade pa...
Q: Questio When is a country said to move into a recession? a) If actual output falls below the potenti...
A: A recession is classified as a significant reduction in overall economic activity that lasts more th...
Q: Suppose that the production function is Y= 10(K)1/4 (L)3/4 and capital lasts for an average of 50 ye...
A: DISCLAIMER “Since you have asked multiple question, we will solve the first three parts for you. If...
Q: 50. x = f(p) = 875 - p %3D %3D | (A) p = 50 (B) p = 70 (C) p = 100 %3D
A: In the mentioned question we have to tell whether the elasticity is elastic or inelastic.
Q: Consider two developed and developing countries, the population growth rate of developed countries i...
A: Given that; The population growth rate of developed countries is 2 % per year Saving rate = 30% The ...
Q: Commodity Fetishism is said to be a distortion in the relations between people. What does this mean...
A: Commodity Fetishism is a Marxist philosophy that says there exists a social relationship between pro...
Q: In the two good specific factor model with diminishing returns to the factors the utility possibilit...
A: 1) In two good specific factor model, two goods are produced and three factors of production are use...
Q: Draw and carefully label the Euro-U.S. dollar foreign exchange graph. You must use the Euro/US $ ex...
A: Answer: An unexpected increase in the US inflation rate relative to the Euro Area will lead to depre...
Q: What is the value of marginal propensity to consume (mpc)? What does it mean?
A: In economics, consumption function states the functional relationship between total consumption and ...
Q: One of the WTO’s central rules prohibits members from raising tariffs above the “bound rates” agreed...
A: The bound tariff is the maximum Most Favoured Nation M-F-N tariff level for a given commodity line.
Q: A new restaurant - Uovo - has just opened in West L.A. It is serving the upscale market, with truly ...
A: The restaurant will maximize profit by producing at MR equals MC, charging the maximum price consume...
Q: Brenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assign...
A: a) The budget line would be given as PX*X+PY*Y= M Given the price of car increases by $4000 when one...
Q: The table below has in the first column the expected inflation rate and the second column contains t...
A: Real interest rates are the ones which take into account the inflation rate while nominal interest r...
Q: A Suppose that we have the following data for Amazon operations in the US: Sales Cost of Goods $469....
A: 4. Calculation of amazon's contribution to gross domestic product :- Net income earned by Amazon = s...
Q: In the following scenarios, you will be given a product and an event. Determine what will happen to ...
A: There are various non price determinant that causes to shift the demand curve: Income of the Consum...
Q: What is the CPI inflation rate from 2020 – 2021 and 2021 - 2022? What does it mean?
A: CPI Inflation Rate : Inflation measured by consumer price index is defined as the change in the pri...
Q: Reter to the graph to the right Atal in the domestic price level n desired consunption and private s...
A: Aggregate Expenditure = Household consumption + Gross investment+ Government spending + Net exports
Q: Zac has a current wealth of £400. He gets an email offering him the chance to enter a prize draw tha...
A: Answer: Given, Current wealth=£400Chance of winning £500=25%Chance of winning £0=75% Let us first ca...
Q: The figure shows the total product curve for different levels of a variable input, labor. Output Tot...
A: Total product divided by the quantity of labor employed gives the average product of labor. Marginal...
Q: John made equal deposits at the beginning of every 3 months into an RRSP. At the end of 7 years, the...
A: Given the number of years = 7 Number depositing, n = 7 years x 4 = 28 Interest rate monthly = 2.50%/...
Q: The chart below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate...
A: Likewise to GDP, aggregate expenditure assesses the complete expenditure of a country at a given tim...
Q: The price of sugar (a substitute for corn syrup) decreased. At the same time, the price of corn star...
A: There are various non price determinants that shift the demand and supply for a good. Changes in the...
Q: Find the value of B. Quantity Total Cost Fixed Cost Variable Cost Average Total Cost Average Fixed C...
A: "Average fixed cost measures the fixed cost of production per unit of output."
Q: Caffeine is a highly addictive drug found in coffee, tea, and some sodas. Unlike cigarettes, however...
A: The effectiveness of taxes on controlling consumption depends oñ the extension of demand or the expa...
Q: 13. The inelasticity of demand for gasoline in the short run makes no theoretical sense. b. makes se...
A: Elasticity measures the responsiveness of quantity demanded to changes in price level.
Q: Question 24 One of the roles of the Fed is to Collect taxes Propose the budget Balance the federal b...
A:
Q: Which of the following is an implicit cost? i. wages paid to workers ii. the normal profit iii. the ...
A: Implicit cost is that cost in which there is no exchange of cash and is not recorded for accounting ...
Q: 4. Notice that the production function of this economy exhibited not diminishing returns, but rather...
A: A change in wealth due to investment is known as capital accumulation. When the wealth increases due...
Q: Which of the following statements about y=Ak growth models is false? a) They assume the production f...
A: The Y=AK growth model is an endogenous growth model whose main property is that of the absence of di...
Q: Consider two developed and developing countries, the population growth rate of developed countries i...
A: Given that; The population growth rate of developed countries is 2 % per year Saving rate = 30% The ...
Q: A perfectly competitive firm is producing the profit-maximizing output level when their variable cos...
A: Variable cost refers to the cost incurred by the firm on the basis of output. This implies it varies...
Q: A shoe store sells 250 pairs of sneakers per month at a per-unit price of $115. This is the price an...
A: Firm will maximise profit at a point where marginal revenue is equal to marginal cost.
Q: Suppose that the unemployment rate is 5% and the natural rate of unemployment is 4%. Answer the cycl...
A: Cyclical unemployment = Unemployment rate - Natural rate of unemployment Cyclical unemployment: If ...
Q: Write two to three paragraphs of three to five sentences each describing how inflation occurs and wh...
A: In financial aspects, hyperinflation is utilized to portray circumstances where the costs of general...
Q: 4. How would you feel defending a client that you knew was guilty?
A: We'd all be Fat Cat Lawyers if a criminal lawyer had a pound for every time they were asked this que...
Q: Two firms produce Bliffs. They compete by simultaneously choosing prices in a single period. The dem...
A: Given:- P(Q)=100-2Q C1(q1)=20q1 C2(q2)=10q2 Please find the images attached for detailed solution.
Q: Suppose that the government is concerned about keeping pace with this long-term growth and ensuring ...
A: Economic stability can only be maintained by maintaining the price level in the economy. There are t...
Q: Eyeglasslux is a single-price monopolist in the eye-glass frame market. It faces a Market demand giv...
A: Q=156-2P2P=156-QP=78-0.5QNow,TR=P x QTR=(78-0.5Q)Q =78Q-0.5Q2MR=78-QGiven,TC=5654+Q2MC=Q(Here if ...
A consumers utility function is given by U(X1, X2)=Xa1X21-a where A>0, 0<a<1 A consumer also faces the prices p1 and p2 and has income level m. Equivalent variation and compensation variation are equivalent ways of evaluating welfare. Discuss
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Suppose the consumer solves the following UMP: max (x1)^2 + (x2)^2 , s.t. p1x1 + p2x2 ≤ w where p1,p2 > 0. a) Plot the indifference curves b) Find the Marshallian demand functions. Show graphically the utility maximizing choices.Prove that the utility maximization conditions as suggested by the “marginal utility framework” are consistent with the “indifference curves approach”.Emma has a utility function U(x1, x2, x3) = log x1 + 0.8 log x2 + 0.72 log x3 over her incomes x1, x2, x3 in the next three years. This is an example of (A) expected value; (B) quasi-hyperbolic utility function; (C) standard discounted utility; (D) none of the above. Emma’s preferences can exhibit which of the following behavioral patterns? (A) preference for flflexibility; (B) context effffects; (C) time inconsistency; (D) intransitivity.
- A consumer is faced with the following utility function, U(x1 x2)=(xp1 1+xp2)1/p, where 0<p<1. The consumer also faces the prices p1 and p2 and has income level m. Set up a Lagrangian optimisation function for the consumer and compute the optimal consumption bundle for the consumerIt is given that a typical consumer has a well-behaved preference structure for his consumption bundle, which includes only two goods, A and B. Further, assume that commodity A is normal and commodity B is Giffen. By keeping commodity A on the x-axis and commodity B on the y-axis, you are required to show the price decomposition for commodity B when $PB decreases exogenously relative to $PA.A consumer is faced with the following utility function, U(x1 x2)=(xp1 1+xp2)1/p, where 0<p<1. The consumer also faces the prices p1 and p2 and has income level m. C) derive the the corresponding expenditure function for the consumer and the hicksian demand function.
- Consider an individual whose preferences are represented by the utility function U(x1,x2) = min {3x1+x2 , x1+3x2}. For this individual, Plot the indifference curve giving a utility level of 6. Calculate her MRS at consumption bundle (x1,x2), does MRS depend on the value of (x1,x2)? Calculate her optimal consumption bundle when she has an income of 24, and P1=1, P2=2. Calculate her optimal consumption bundle when she has an income of 24, and P1=1, P2=4. Calculate the income and substitution effects resulting from the change in price of Good 2 (on the level of Good 2 consumption!) Calculate her demand function X1* (P1, P2,m) Calculate her own price, cross price, and income elasticities at X1*(1, 2, 24) and at X1*(1, 4, 24). Based on these, can you say the goods 1 and 2 are (gross, or Marshallian) complements or substitutes?Casper consumes cocoa and cheese. Cocoa is sold in an unusual way. There is only one supplier, and the more cocoa you buy from him, the lower the price you have to pay per unit. In fact, x2x2 units of cocoa will cost Casper √x2x2 dollars. Cheese is sold in the usual way at a price of $2 per unit. Casper's income is $10 and his utility function is u(x1,x2)=x21x2u(x1,x2)=x12x2, where x1x1 is his consumption of cheese and x2x2 is his consumption of cocoa. (1) Sketch Casper's budget set. (2) Sketch some of his indifference curves. (3) Calculate the amount of cheese and the amount of cocoa that Casper demands at these prices and this income. Do not forget to check the corners. (Hint: Write down the Lagrangean for this problem and solve the maximization programa. Utility function of Mr. Haroon is given by Find the optimal quantities of the two commodities (X and Y) by using Lagrangian method, if it is given that price of commodity X is Rs. 5 per unit, price of commodity Y is Rs. 10 per unit and income of Mr. Haroon is equal to Rs. 1000. b. Using indifference map elucidates at which point Mr. Haroon would be able to achieve maximum utility.
- The non-satiation assumption we make about people's's preferences entails that the indifference curves never cross. True or FalseIf total utility increases as wealth increases, the first derivative of the utility function is negative. TRUE OR FALSEBob has a utility function U(x, y) = √x1 + 0.8√x2 + 0.64√x3 over his incomes x1, x2, x3 in the next three years. This function is an example of (A) expected utility; (B) quasi-hyperbolic utility function; (C) discounted utility; (D) none of the above. . Which of the following preferences agree with Bob’s utility? (A) (9, 10, 11) ≻ (9, 10, 12); (B) (9, 10, 11) ≻ (11, 10, 9);(C) (9, 10, 11) ≻ (9, 11, 10); (D) none of the above. Bob’s utility function implies (A) time stationarity; (B) transitivity; (C) impatience; (D) all of the above.