Ivar participates in a lot of Viking raids and needs to buy swords every month. He is offered a sword subscription. For a monthly fee he can buy as many swords as he wants at a per-sword price of $127. Swords can only be purchased in integer amounts. His Marginal Benefits (MB) from swords in a month is given in the table below. What is the maximum Ivar is willing to pay for this sword subscription. Quantity Marginal Benefit 1 $189 $146 $80 $76 $66 2345
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- Studying has both costs and benefits. If you continue tostudy (e.g., for a test) for as long as the marginal benefitsof studying are greater than the marginal costs, and youstop studying when the two are equal, will your actionbe consistent with having maximized the net benefits ofstudying? Explain your answer.Co. XYZ manufactures a productand sells it for $8 per unit. Her fixedcosts are $5,000 and her variablecost per unit is given by the equationCalculate the equilibrium quantity qalgebraically. 2.444 (X)-2200 A. (q-800) B. q=900 C. (q 650) D. None of the above In the previous problem (27), calculate the amount ofequilibrium Total Income. A. 4,500 B.$3,000 C. $7,200 D. $9,000 In the above problem (27), calculate thebreak-even Total Cost amount. A. 4,500 B. $3,000 C. $9,200 D. 7,200 In the previous problem (27)determine the profit when q-1800.modes of A. $4,500 B. 5,000 C.$6,000 D. 7,000 In the previous problem (27), determine the gain when q-450. A. $2,500 B. -$2,500 C.$6,000 D. -$4,500 In the aboveproblem (27), find the required output (q), to make a profit of$10,000. A. 3,000 B. 4,000 C. 2,500D. 2,700Suppose two parents present their 16-year-oldwith a list of the cars that they will allow him tobuy. If the parents decide to add another vehicle tothe list, is that affecting the choice architecture fortheir son? Why or why not?
- 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?Ewa spends all her 600 PLN bonus on the purchase of sweets and cosmetics. Draw the Ewa's budget line, knowing that her favorite sweets cost PLN 10 per pack and the price of cosmetics is PLN 25. •How will Ewa's situation be affected by the PLN 50 bonus increase? •What will happen if the price of cosmetics increases to PLN 30? •How, from the point of view of initial situation, we will evaluate the following quantitative combinations: –30 packages of sweets and 15 cosmetics –60 packages of sweets and 24 cosmetics –20 packages of sweets and 10 cosmetics –10 packages of sweets and 15 cosmeticsTrue/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)
- a. A young connoisseur has $600 to spend to build a smallwine cellar. She enjoys two vintages in particular: a 2001French Bordeaux (wF) at $40 per bottle and a less expensive 2005 California varietal wine (wC) priced at $8. Ifher utility is U (wF, wC))=wF2/3 w C1/3 ,then how much of each wine should she purchase?b. When she arrived at the wine store, this young oenologistdiscovered that the price of the French Bordeaux hadfallen to $20 a bottle because of a decrease in the valueof the euro. If the price of the California wine remainsstable at $8 per bottle, how much of each wine shouldour friend purchase to maximize utility under thesealtered conditions?c. Explain why this wine fancier is better off in part (b)than in part (a). How would you put a monetary value onthis utility increase?Situation A: If a person lives for 3 years with a disease and the current standard of care for that disease means he/she lives with a utility level of 0.7 .-What is the QALY? If that person takes a new medicine (Medicine A) because of which his/her utility level increases to 0.8,-What will be the new QALY? Calculate the benefit of new medicine.On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according tothe functionU(c, b) = 20c− c²+ 18b − 3b²a. How many cigars and glasses of brandy does he consume during an evening? (Cost isno object to J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum ofglasses of brandy and cigars consumed to 5. How many glasses of brandy and cigarswill he consume under these circumstances?
- (a) A consumer with income I=120 facing prices pX = 4 and pY = 8 for two goods X and Y (for each good she prefers more to less, with diminishing MRS) chooses optimally to consume 12 units of X. If the prices change and now pX = 6 and pY = 4, what is the possible range for her new optimal X consumption? (b) Forget about (a). A consumer with I=$240 budget is shopping for apples (x) and oranges (y). Apples cost $1 each up until 60 units; thereafter each apple costs $2. Similarly, oranges cost $1 each up until 60 units, and thereafter $2 each. Draw the graph of feasible set of bundles for the consumer with relevant points and numbers (shade the feasible area), no explanation needed. (c)(HARD!) In (b), calculate the optimal bundle assuming the consumer’s utility function is u(x,y) = x5y.You are considering going to a football game. However, the roads are cover in ice due to bad weather. Your ticket was a gift. You derive a value of z from attending the game, and a cost of D for driving on the icy roads. Your utility function is given by: ug(Z) + ui(D) = In(Z - 3) - In(2 - D). In your ultimate wisdom, you calculate that the cost of driving on the icy roads is 1 unit (So, D=1). What is the minimum value you must obtain from attending the game, so that you decide to go? Solution sent me fast ..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…