Jack's preferences are represented by the utility function U = (X^0.4)*(Y^0.6). PX = 2, PY = 3 and h budget is $120. Setting the Lagrangian to solve Jack's utility maximization problem, what is the value of A? Please show full work. %3D
Q: Evaluate the relationship between risk probability, risk impact and risk exposure.
A: In general, firms can calculate risk exposure using one of two methods: quantitative or qualitative.…
Q: An untreated wooden pole that will last 10 years under a certain soil condition costs P 12,000. If a…
A: Return on Investment or ROI is defined as the measure of performance that is generally used for the…
Q: Marginal Cost RSJI Avorage Tal Cost ROQ,I Demand RULI Marginal Revenue 28. 9,0,0, 0, QUANTITY The…
A: The economic profit could be measured by the difference between the revenue generated through the…
Q: In a representative Real Business Cycle model, with capital stock in period t+1 defined by
A: Effective investment refers to the net addition to the capital stock of economy which is measured by…
Q: One crucial factor contributing to the functioning of the Yap island’s stone fei, and the IOU used…
A: The liquidation of an Irish bank gives an especially valuable chance to gain a better understanding…
Q: In the context of optimal pricing, cannibalization refers to: a. A firm's low price for one of their…
A: Cannibalization refers to the decrease in sales volume and revenue as a result of introduction of…
Q: Maintenance cost for a small bridge with an expected 60-year life are estimated to be $1,000 each…
A: Equivalent annual cost (EAC) is the annual cost of purchasing, working, and keeping a resource over…
Q: What are the major industries in Canada
A: Canada has sizeable industries including automobile, aircraft, energy, power, and technological…
Q: Briefly explain how an expansionary fiscal policy works.
A: In an economy, fiscal policy refers to the action of the government when it tries to influence the…
Q: If Mark produces five pairs of shoes, his total costs are a. $400 b. $370 c. $360 d. $320
A: Total cost is the sum of fixed cost and variable cost.
Q: 6. There was an unexpected burst of inflation in the late 70s and early 80s that is sometimes called…
A: Real interest rate = nominal rate - inflation( Expected or actual). And people care about the real…
Q: why is GDP an economic indicator and why do we need to use it as a measure of the health of an…
A: Hi! Thank you for the question. As per the honor code, We’ll answer the first question since the…
Q: A manufacturer produces a certain product at a labor cost of P 315 per unit, material cost of P 100…
A: As given labor cost = 315/ unit Material cost = 100/ unit Fixed cost = 461600 Variable cost = 3/…
Q: Set up the objective function and the constraints, but do not solve. Wison Electronics produces a…
A: The correct answer is given in the second step.
Q: A manufacturing company purchased a new equipment for ₱53,000 and paid ₱1,500 for freight and…
A:
Q: A firm considering the installation of an automatic data processing unit to handle some of its…
A: A amount of money today is worth more than a sum of money in the future, according to the concept of…
Q: Elon Musk's The Boring Company wants to invest in a subway to be constructed in Metro Manila to…
A: maglev bullet difference(in percentage) capital investment 46,100,000 75,000,000 61% annual…
Q: First, briefly explain the laws of supply and demand. In doing so, be certain your answer includes…
A: We can provide solution only for the first three parts and the last part (labeling the corresponding…
Q: Create a 2 days plan on how to save money.
A: Savings refers to the cash that an individual has left over once they deduct out their shopper…
Q: how does Socio-economic Factors Affect Investors and Suppliers explain each briefly.
A: Socio-economic factors The term "socio-economic" relates to societal economic issues. These elements…
Q: Suppose the total demand for computers and the total supply of computers per month in the Calgary…
A: Equilibrium is achieved at a point where demand curve intersects the supply curve. Any price below…
Q: at happens to the firm's marğinal revenue as it sėlls additional unit =ct one: a. Marginal revenue…
A: A monopolist can't generally discriminate impeccably between purchasers, since it doesn't have a…
Q: 4. Given the following total revenue function TR(Q) and the total cost function TC(Q), maximize…
A:
Q: (d) How many kilos of coffee should Dalia roast if she wants to maximize her profits? Give your…
A: We have MR = 21-1.4Q MC = 12+0.6Q
Q: Give the formulas for and plot average fixed cost, AFC, marginal cost, MC, average variable cost,…
A: Differentiating the above total cost function with respect to Q, we get the marginal cost function.…
Q: Compare the interest earned by $9,000 for six years at 7% simple interest with interest earned by…
A: Simple interest and compound interest are earned on initial amount deposited but with sufficiently…
Q: An ag firm is looking to produce 30 units of output. If the firm were to operate at the least-cost…
A: Required Q=30, w=10 r =50
Q: 12. Envelope Curve II Consider a perfectly competitive constant-cost industry with n identical…
A: A perfectly competitive industry with a horizontal long-run industry supply curve as a result of no…
Q: -When you begin working in an industry if given the opportunity to choose the method by which you…
A: Below is the formula to find the future worth and present worth: Future Value = Present Value 1 +…
Q: Illustrate and explain how equilibrium is determined in an olipolistic market.
A: Markets that are controlled by a limited/less number of sellers are known as oligopoly markets. They…
Q: The only owner-supplied input in a corporation is its equity, which is the value of the…
A: ANSWER: OPTION C(incurred an economic loss of $30,000). EXPLANATION: ECONOMIC PROFITS : *It is…
Q: 17. When a large country imposes an import tariff on good X O a. Domestic production of good X…
A: When talking about the large open economy, it is ths country that has a significant share in the…
Q: _______ A monthly index that measures changes in pricesthat consumers pay for goods is referred to…
A: Inflation is defined as an increase in the prices of almost all the goods and services produce an…
Q: 1. Without a thorough strategy formulation process, is it possible for an organization to survive in…
A: Every organization has its own goals and visions for the long term achievements of the organization…
Q: 4. Cherry Market The short run equilibrium market price in the perfectly competitive cherry market…
A: Given Short-run cost function: SRTC=Q2+3Q+3 .... (1) Market price p*=9
Q: The long-run aggregate supply curve touches the horizontal axis at a value that equals O Aggregate…
A: here we find the correct option as follow;
Q: The minimum possible average cost of production for videotape rentals is S1.50, and the minimum…
A: In the mentioned question we have been asked when the company should shut down the video tape rental…
Q: Scarcity and Choice Understanding what the market system does well and what it does badly is…
A: *Answer: 1. The true cost of something is not just the value the market puts on them. A salary is…
Q: How can growth and development affect the country’s economy?
A: Economic growth is defined as a rise in the market value of goods and services generated in the…
Q: If firms in the market are producing output but are currently making economic losses, P illustrates…
A: In economics, the marginal cost of production is the change in total production cost that comes from…
Q: A Company is contemplating the purchase of a new milling machine. The purchase price of the new…
A: Given; Purchase price= $60000 Annual operating cost= $2675.40 Salvage value= $0 Revenue generated=…
Q: In the closed economy growth model, if you keep increasing the savings rate, consumption per capita…
A: While a greater saving rate means less consumption, it also means more capital investment and,…
Q: 12. A car dealer advertise the sale of a car model for a cash price of P280,000. If purchased on…
A: Given cash price of car = 280,000 P Down payment = 15 % of price = 42000 Remaining balance to be…
Q: Keynes 1. Why is there more 'crowding out' when using fiscal policy with an IS curve that is highly…
A: Answer: Introduction: Crowding out: when increased government spending leads to a decrease in…
Q: Farmer Stella has a crop of hemp to be harvested. Picking the crop requires a fixed number of sacks…
A: The marginal product of labor is the change in total output due to a change in the number of…
Q: The vertical long-run aggregate supply curve satisfies the elassical dichotomy because the natural…
A: Aggregate supply curve shows relationship between price and real output supplied.
Q: How would you describe the relationship between corporate taxes and the GDP of a country?
A: In an economy, the corporate tax refers to the tax imposed by the government on the income of…
Q: 1. (.. .-, The Zany Florist is a firm operating in the florist industry in Toronto, Ontario…
A: Introduction Here production function of Zany has given. a) The production function of Zany is y =…
Q: 1) If a $2,000 one-year bond pays $170 in annual interest, the interest rate on this bond is (do NOT…
A: Bond is the the form of debt issued by the government or corporate sector to raise capital from the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Mats, who has reference-dependent preferences over beer and money, goes to the local pub with a friend, but is not planning on drinking any beer or spending any of his 50 Euro in cash. Let his end-of-evening outcomes in pints of beer consumed and cash be c1 and c2, respectively, and let his reference point in pints of beer and cash be r1 and r2, respectively. Then, Mats’ utility is given by v(6c1 − 6r1) + v(c2 − r2), where v(x) = x for x ≥ 0, and v(x) = 1.5x for x < 0. (a) Suppose that the price of beer is pB. Calculate Mats’ utility from drinking one pint of beer at this price. What is Mats’ utility from drinking no beer? And, comparing these two utility values, what is the maximum price pB that Mats would pay for one beer? (b) Suppose that Mats unexpectedly gets a pint of beer as part of a promotion at the pub, and incorporates its consumption into his reference point in beer. [Hint: this means that (r1, r2) = (1, 50).] Suppose that Mats could sell the beer at a price pS.…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 correctYou have k20 per week to spend and two possible uses for the money: telephoning friends back home and drinking coffee. Each Hour of phoning costs k2 and each cup of coffee costs k1. Your utility function is U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink. What are your optimal choices? What is the resulting utility levels? You can use the standard result on the constrained maximization of such a function, but must state in clearly
- I. A)MRS=1/3, B)MRS=1/4, C)MRS=4/3, D)MRS=12 II. A)Rhea should buy more bread, less milk, B)Rhea should buy more milk, less bread, C) Rhea maximizes her utility at bundle A, so she should not change her consumptions of either good, D) Rhea cannot afford bundle A, so she should buy less of both goods III. A)Rhea's MRS at bundle A is greater than the price ratio (Pb/Pm), B)Changing her bundle moves Rhea to a higher indifference curve, C)The slope of the indifference curve (where bundle A is found) is not equal to the slope of Rhea's budget constraint, D)All of the above statements explain your answer to part II.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.Reese thinks peanut butter and chocolate are great when separate, but when they combine they are even more epic. In other words, Reese likes to eat either peanut butter or chocolate, but when he eats them together, he gets additional satisfaction from the combination. His preference over peanut butter (x) and chocolate (y) is represented by the utility function: u(x, y) = xy + x + y Suppose that now Reese loses almost his entire income, so that he is left with only one dollar, i.e. his new income is I0 = 1. If prices are still px = 2, py = 4, what is his new optimal consumption of x and y (Hint: Remember that consumption of both goods must be weakly positive, i.e. x∗ ≥ 0 and y∗ ≥ 0) (a) x∗ = 0.5, y∗ = 0(b) x∗ = 0.25, y∗ = 0(c) x∗ = 0.75, y∗ = 0.25(d) x∗ = 0.75, y∗ = 0(e) x∗ = 0.5, y∗ = 1
- You have £20 per week to spend, and two possible uses for this money: telephoning friends back home, and drinking coffee. Each hour of phoning costs £2, and each cup of coffee costs £1. Your utility function is U(X,Y) = XY, where X is the hours of phoning you do, and Y the number of cups of coffee you drink. What are your optimal choices? What is the resulting utility level? You can use the standard result on the constrained maximization of such a function, but must state it clearly. Now suppose the price of telephone calls drops to £1 per hour. What are your optimal choices? What is the resulting utility level? How much income per week will enable you to achieve the same quantities at the new prices as the ones you chose before? What income will enable you to attain the same utility as you did before? Comment on your answer in the context of equivalent variation and compensating variation.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 above***PLEASE NOTE: QUESTION HAS TWO PARTS REQUIRING ANSWER*** Q: Johnny Football has a utility function of the form ? = √?. Johnny is beginning his senior year of college football. If he is not seriously injured, he will receive a $1,000,000 contract for playing professional football. If any injury ends his football career, he will take a job as a refuse removal facilitator in his hometown that pays $10,000. There is a 10% chance that Johnny will be injured badly enough to end his career. a. What is Johnny’s expected utility? b. How much would Johnny be willing to pay to remove the financial riskhe faces? That is, what $p would he pay for a $1,000,000 insurancepolicy so that he would have $1,000,000-$p even if he had a seriousinjury? Assume he wouldn’t work for $10,000 if he had the insuranceand he was injured. Hint: You should set his utility with certainty(U($1,000,000-$p)) equal to his expected utility with risk (found inpart a) and solve for p.
- Ceja has utility function U=A2*B2 , where A equals the number of apples she eats each week, while B is the number of bananas she eats each week. Ceja has $20 to spend on fruit each week. The price of an apple is $1, while the price of a banana is $0.25. Find out the combination of Apples and Bananas that maximize Ceja’s satisfaction. If price of Banana is increased by $.25, what will be the new combination of A and B that would maximize her utility? Show graphically and drive the demand curve for BananasMichael does not like to mix peanut butter and jelly in the same sandwich. However, he will consume them separately; for him, a sandwich with 1 spoon of peanut butter is exactly the same as a sandwich with 2 spoons of jelly. Michael has an income of m = 50, and the prices per spoonful of peanut butter and jelly are pPB=5 and pJ=11. Please write down Michael’s utility function over peanut butter (PB) and jelly (J). 2. Please determine Michael’s Marshallian demands PB*m and J*m3. Please determine Michael’s new Marshallian demands PB*m and J*m, when the price of peanut butter falls to pPB = 1.4. What are the (Hicks) SE and IE? Draw a diagram to show your analysis, with peanut butter on thehorizontal axis, and jelly on the vertical axis. 5. Recall that there are two different types of substitution effects. For example, in Q2 we have used theHicks SE. Does your answer to the last part change if we use the Slutsky SE? Justify. 6. Nam likes his peanut butter and jelly sandwiches with exactly…You have k20per week to spend and two possible uses for this money,:telephoning friends back home and drinking coffee. Each hour of phoning costs k2 and each cup of coffee costs k1. Your utility functions U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink. Now suppose the price of telephone calls drops to k1 per hour. What are your optimal choices? What is the resulting utility level