Li's marginal rate of substitution of hamburger for steak is 1/4, and Zhang's marginal rate of substitution of hamburger for steak is 2. The allocation of hamburger and steak Pareto-efficient between Li and Zhang because O is not; if Li traded some amount of hamburgers to Zhang for some steak, it is possible that each can be better off O is; Zhang's MRS is exactly 8 times larger than Li's MRS is; no trade can make both Li and Zhang better off O is not; if Li traded some amount of steak to Zhang for some hamburgers, it is possible that each can be better off
Q: Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior…
A: The concept of HHI can be explained as a Index. It is a measure of market concentration used to…
Q: Private markets may underallocate resources to a good or service that is affected by the moral…
A: The allocation of resources is an important decision taken by any firm in the market to earn maximum…
Q: Alexa is a 35-year-old accountant who earns $70,000 per year. She is married and has 3 children. She…
A: Alexa's current age: 35 Retirement age: 70 Annual salary: $70,000 Expected salary increase rate:…
Q: Draw consumption and marginal cost time paths for a depletable resource with a stable demand and…
A: As per the request, part b i and ii have been answered.In environmental economics, the constant cost…
Q: Consider the following production function: Q = (6L +3K)¹/2 1. What is the Marginal Product of Labor…
A: The production function gives the value of output that can be produced with given inputs and…
Q: 2. Profit maximization A profit-maximizing firm will use more of a factor of production when: The…
A: Marginal revenue product (MRP) refers to the change in total revenue a firm experiences due to using…
Q: Answer only correct A country had real GDP per person of 5800 in 2005 and has had average real…
A: GDP refers to the total monetary value of all the final goods and services that a nation produces in…
Q: 9. The price of money Suppose that Rajiv borrows $50,000 at 5% per year to purchase equipment for…
A: Compound Interest:Compound interest is the interest calculated on the initial principal and also on…
Q: The total relevant cost (TRC) of holding inventory in a plant for purchased materials is given as:…
A: Given: TRC = (6000)(60/Q) + (0.30)(12)(Q/2) + (6000)(12) To find the optimal Q, we'll differentiate…
Q: Suppose that the demand curve for wheat is and the supply curve is The government provides…
A: The demand function is -The supply function is- Subsidy is per unit.
Q: Which of the following goods likely has the most elastic demand? O Cigarettes O Coffee Medicine…
A: Elastic Demand: When the quantity of an item or service is extremely responsive to price…
Q: Rent controls force landlords to price apartments below the equilibrium price level. An immediate…
A: The question addresses the long-run outcomes when cities impose rent controls, causing apartments to…
Q: When you choose to buy insurance, are you speculating? When you choose not to buy insurance, are you…
A: In the field of economics, making investments or financial decisions based on unpredictable future…
Q: Suppose that the price of Good X decreases. Which of the following will happen to the budget…
A: The budget constraint represents all the combinations of goods that a consumer can afford given…
Q: Abby likes tangerines and oranges. For every 4 tangerines, Abby is equally happy to consume 2…
A: We need to find combinations of x and y (number of tangerines and oranges, respectively) that give…
Q: 0.10 0.08+ 0.06+ 0.04- 0.02- 0.00 0 Recovery time (minutes) 20 40 60 80 Distance sprinted (metres)…
A: A graph illustrates the way 2 variables are associated with one another. Every point on the graph…
Q: orking capital.
A: Working capital is a fundamental monetary metric that measures an employer's potential to cover its…
Q: Suppose a consumer had a utility function given by: U = X²Y0.5. If the price of Good X (Px) is $3…
A: The utility function is given as The price of good X is $3.The price of good Y is $6. The budget for…
Q: During 2013, 400 people were hired for a particular job. Of the total, 300 were white and 100 were…
A: The employment practices having a discriminatory effect on protected groups is known as adverse…
Q: what is marcoeconomic?
A: Macroeconomics is the branch of economics that focuses on the study of the economy as a whole. It…
Q: a) What is the logic of probability sampling? b) c) V. Distinguish between broad objective and…
A: The logic of probability sampling lies in the concept of randomness. In probability sampling, each…
Q: If the consumer's utility function is given by U(x, y) = 10x0.5 0.5, solve for the optimal quantity…
A: Consumer theory is important in economics because it investigates how people maximize their…
Q: 8. Effects of a tariff on international trade The following graph shows the domestic demand for and…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: Graphical 4. Plot production function, savings function, and depreciation function in a slow model…
A: The Solow growth model is an economic framework that examines how variables such as savings,…
Q: Find the value of z such that 0.96420.9642 of the area lies between −z−� and z. Round your answer to…
A: The question is asking for the z-score that corresponds to the middle 96.42% of the area under the…
Q: a. The ABC company is producing an item at unit ost of GHS.4. II.the supply q=160+8 p, where q…
A: Costs refers to the expenses that is incur in the process of production of goods or services. There…
Q: Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for…
A: Elasticity of demand is an important concept in the theory of consumer behavior in the ambit of…
Q: 4. In an attempt to increase revenues and profits, a firm is considering a 5 percent increase in…
A: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price,…
Q: Amid an economic recession, a government decides to implement an expansionary fiscal policy. This…
A: A recession refers to an economic downturn described by a critical and sustained decrease in…
Q: Sketch a marginal cost curve for a firm that has constant marginal costs of production up to its…
A: Marginal Cost: It is the additional cost incurred by producing one more unit of output. It is…
Q: Suppose that is a normal good and y is an inferior good. The Marshallian demand functions for these…
A: One of the foundational ideas is the Marshallian demand function, which is named after economist…
Q: Q. 6 The following graph shows the demand and supply for the grape market. 5 4.5 4 3.5 3 2.5 2 1.5…
A: Market dynamics are economic events that disrupt the supply-demand equilibrium, resulting in price…
Q: The weights of newborn baby boys born at a local hospital are believed to have a normal distribution…
A: The objective of this question is to find the probability that a randomly selected newborn baby…
Q: An industrial engineering consulting firm signed a lease agreement for simulation software.…
A: Present worth refers to the current account value of a series of future cash fl;ows, discounted at a…
Q: 41) Which of the following is a tool for achieving macroeconomic objectives? A) Fiscal policy B)…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: Show the effects of expansionary policy on output and the price level in an open economy when there…
A: Government involvement is crucial in formulating policies that influence economic, social, and…
Q: Describe some potential causes of a negative aggregate demand shock and a negative aggregate supply…
A: Since the question, mentions explaining the causes and outcomes without any mention about graphical…
Q: Consider the graph below. Assume that, initially, an economy has long-run aggregate supply…
A: The aggregate demand is the total demand for goods and services at the existing price level in the…
Q: Numerical 1. Consider the Solow model with population growth rate of n and deprecation rate of 8.…
A: The per capita production function: y=f(k)=kβHere, y denotes the output per capita and k denotes…
Q: 3. Consider the following game: Out 2 2 1 9 Player 1 Player 1 X In A Player 2 B 5 5 2 a) Does the…
A: Since this question holds more than three sub-parts, due to restrictive Bartleby policy, we are not…
Q: (a) Develop the game theory table for this game. The values should be expressed as the gains (or…
A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…
Q: What does this example show us about the failed attempt at 'collusive pricing arrangement' due to…
A: Rival companies fighting for market share are examples of competition in the business world.…
Q: Suppose that commodity 1 is stinky garbage. You are paid $5 per unit to accept it. Commodity 2 is a…
A: IC stands for Indifference Curve. In microeconomics, An indifference curve represents a graphical…
Q: By the year 2023, the number of Hispanics in the United States is projected to grow from the current…
A: Economic analysis refers the methodical way to deal with determining the optimum utilization of…
Q: In automobile mileage and gasoline-consumption testing, 13 automobiles were road tested for 300…
A: The objective of the question is to calculate the mean, median, and mode for City and Highway…
Q: Use the three-step method to analyze the effects of each event on the equilibrium price and quantity…
A: The equilibrium point is the balanced state of the economy when the demand equals the supply of…
Q: 1) The interest rate earned on a money market deposit account is generally higher than the interest…
A: In the economy, people have surplus money or savings with them. This money is deposited by people in…
Q: The blue line in the graph below is an example of... X₂
A: Indifference curves(IC) depict different combinations of 2 goods that provide a consumer with the…
Q: A farm raises chickens and produces oranges. The marginal cost of producing each of these products…
A: The combination of goods or commodities at the available resources in the production is referred to…
Q: Using a graph, explain why a firm might not want to spend A on advertising, even though it shifts…
A: A firm will maximize profits by producing at the level of output where the marginal cost equals the…
Step by step
Solved in 4 steps
- 10. Consumer A and B have each been given an allocation of 2 goods x and y (assume each has positive amounts of both goods). At this allocation, consumer A has an MRS of 2, while consumer B has an MRS of 1/2. Could this allocation be Pareto efficient? Explain why or why not.If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then (Select all that applies) Group of answer choices a. two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios. b. two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRSs may differ. c. any two consumers who consume both goods must consume them in the same ratio. d. for any two consumers who consume both goods, neither will prefer the other consumer’s bundle to his own. e. all consumers receive the bundle that they prefer to any other bundle the economy could produce for them.The following table shows the marginal utility per dollar of apples and pears for five consumers: Consumer Marginal Utility Per Dollar Apples Pears Darnell 8 5 Eleanor 7 8 Jacques 6 6 Kyoko 5 4.5 Musashi 4 4 Darnell, Eleanor, and Kyoko are not optimizing over their choice of fruit. In the following table, indicate which fruit each consumer should increase consumption of in order to achieve the optimal fruit consumption bundle. Consumer Apples Pears Darnell Eleanor Kyoko
- Which is the correct answer ? Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges. At this allocation, Joe's marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane's marginal utility of apples is 6, and her marginal utility of oranges is 10. The current price of apples is R4 per unit and the current price of oranges is R5 per unit. To reach a competitive equilibrium, the required price adjustment is: A. A decrease in the orange price relative to the apple price. B. A decrease in the apple price relative to the orange price. C. No change in the relative prices. D. An increase in both prices.3. Jane is currently consuming 4 glasses of milk and 10 cookies, while Betty is consuming 9 glasses of milk and 3 cookies. Jane views milk and cookies as perfect substitutes (her MRS is 1), while Betty prefers cookies to milk and is willing to give up 3 glasses of milk to get 1 cookie. Is the current allocation of milk and cookies Pareto efficient? Explain with use of a diagram.| Two people trade two goods that they cannot produce. Suppose that one Mary's indifference curves are bowed away from the origin-the usual type of curves-but Joe's are concave to the origin. In an Edgeworth box, show that a point of tangency between the two consumers' indifference curves is not a Pareto efficient bundle. (Identify another allocation that Pareto dominates.) Put Mary on the southwest corner and Joe on northeast corner.
- Grapes and bananas are perfect complements for Jane and Betty. Jane eats one grape per three bananas.; Betty eats three grapes per one banana. Once they go to sports for hours, Jane had 20 grapes and 10 bananas and Betty had 10 grapes and 20 bananas. (assume that grapes and bananas can be divided into half) 1.Show all Pareto optimal allocations of grapes and bananas between Jane and Betty in the Edgeworth Box. Draw a bunch of indifference curves and look for tangencies.Smith and Jones are stranded on a desert island. Each has in her possession some slices of ham (H) and cheese (C). Smith prefers to consume ham and cheese in the fixed proportion of 2 slices of cheese to each slice of ham. Her utility function is given by Us = min(10H, 5C). Jones, on the other hand, regards ham and cheese as substitutes – she is always willing to trade 3 slices of ham for 4 slices of cheese, and her utility function is given by UJ = 4H + 3C. Total endowments are 100 slices of ham and 200 slices of cheese. a. Draw the Edgeworth Box diagram for all possible exchanges in this situation. What is the contract curve for this exchange economy? b. Suppose Smith’s initial endowment is 40 slices of ham and 80 slices of cheese (Jones has the remaining ham and cheese as her initial endowment). What mutually beneficial trades are possible in this economy and what utility levels will Smith and Jones enjoy from such trades? c. Now imagine a new endowment in which Smith has 60 slices…If an allocation is already Pareto efficient and if indifference curves between the two goods have no kinks, then a. two consumers who consume both goods must have different MRS's between them, but consumers may consume the goods in different ratios. b. two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRS's may differ. c. any two consumers who consume both goods must always consume them in the same ratio. d. one consumer can be made better off but always at the expense of the other. e. all consumers receive the bundle that they prefer the most among all bundles on the entire Edgeworth box.
- Remy and Emile consume only cheese (x,) and strawberries (x2). Remy's preferences are described by UR = min{xf, 2x5}while Emile's preferences are described by UE = xf + x5 . Remy has 8 pieces of cheese and 1 pint of strawberries while Emile has 4 pieces of cheese and 3 pints of strawberries. (a) Draw an Edgeworth box with x, on the horizontal axis and x, on the vertical axis. Position Remy on the bottom left corner and Emile on the top right corner. Indicate the total number of units of x, and x2. Label the endowment allocation. Show Remy's and Emile's indifference curves. (b) Derive the equation of the contract curve. In your graph in (a), draw the contract curve. (c) Set x1 as the numeraire, i.e., assume p, = 1 and p2 = p. Find the competitive equilibrium. Hint: For Emile to consume at a Paretoefficient allocation, what should the prices be? (d) Redraw the Edgeworth box. Indicate the equilibrium allocation, e. Draw the equilibrium budget line.Brienne starts with 10 food and 10 clothing. Jaime starts with 10 food and 20 clothing.1. Represent the initial allocation in an Edgeworth box.2. Brienne regards the two goods as 1-for-1 substitutes, while Jaime regards the two goodsas 1-for-1 complements. In your Edgeworth Box, shade the allocations that are Paretosuperior to the initial allocation.The following table shows Ellie's utility from consuming slices of pie and cans of 7 - Up. Slices of Pie 0 1 23456 Marginal Utility Cans from Last Slice of 7-Up 0 1 2 120 100 80 60 40 20 234 5 6 Marginal Utility from Last Can 120 60 45 30 20 15 Suppose Ellie has $6 per week to spend on pie and 7 - Up and that the price of a slice of pie is $1.00. 1.) Use the point drawing tool to plot Ellie's demand for 7-Up at a price of $2.00. Label this point 'A'. 2.) Use the point drawing tool to plot Ellie's demand for 7- Up at a price of $0.50. Label this point 'B'. 3.) Use the line drawing tool to connect the dots to form Ellie's demand curve. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Price of 7-Up 12 4.5- 4- 3.5- 3- 2.5- 2- 1.5- 1- 0.5- 0- 3 4 Quantity of 7-Up 5