Problem &et Production Functions Given the gallowing hypothetical data an inprt (x) and tätal Physical Pro duct (TPP) of xYZ carporation. Marginal Phuysical Pro du ct (MPP) Tatal Average Physi cal Product CAPP) Input (x) Phypical Pre duct (TPP) 14 24 8. 32 10 38 12 42 44 44 14 18 42 20 30 2924
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- Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?Nimbus, Inc., makes brooms and then sells themdoor-to-door. Here is the relationship between thenumber of workers and Nimbus’s output during agiven day:Workers OutputMarginalProductTotalCostAverageTotalCostMarginalCost0 0 ____ ________ ____1 20 ____ ________ ____2 50 ____ ________ ____3 90 ____ ________ ____4 120 ____ ________ ____5 140 ____ ________ ____6 150 ____ ________ ____7 155 ____ ____a. Fill in the column of marginal products. Whatpattern do you see? How might you explain it?b. A worker costs $100 a day, and the firm has fixedcosts of $200. Use this information to fill in thecolumn for total cost.c. Fill in the column for average total cost. (Recallthat ATC T 5 C Q/ .) What pattern do you see?d. Now fill in the column for marginal cost.(Recall that MC TC 5 D ∆ / Q.) What patterndo you see?e. Compare the column for marginal productwith the column for marginal cost. Explain therelationship.f. Compare the column for average total costwith the column for marginal cost. Explain…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 president of LeTall University, President John, spends $30 per week on pizzas (qz)and beers (qb). At LeTall Pizza, his go-to pizza joint, pizza costs $3 per slice and beeralso costs $3 per can. Assume fractions of the goods are allowed.(a) Draw President John’s budget line (qb on the horizontal and qz on the vertical axis).(b) President John receives a coupon from LeTall Pizza. The coupon, which will expirein a week, allows him to buy a can of beer at a discounted price of $1 per can. Itis, however, only good for a dozen cans of beer. Draw President John’s budget lineunder the coupon. Label any critical points on the budget line.(c) In another week, LeTall Pizza offers a special deal for pizza. For every half dozenslices of pizza bought during the week, one can get two additional slices for free.Draw President John’s budget line under the special deal. Label any critical pointson the budget line.a. Andre has a salary of $1000. He spends his entire budget on shoes and beers.The cost for a pair of shoes is $15 and the cost for can of beer is $25.i. Construct Andre’s budget constraint (place) beers on the y-axis. [4marks]ii. Suppose Andre’s salary rises by 25%. Also suppose that the price ofshoes and beers each rise by 40%. Construct Andre’s new budget constraint. What is the difference between the new and old budgetconstraints? [4 marks]iii. Suppose that the price of beers fell from $25 per beer to $15. ConstructAndre’s new budget constraint. What is the difference between the newand old budget constraints. [4 marks]b. Explain the relationship between the budget constraint and indifference curveat consumer optimum. [3 marks]a. Andre has a salary of $1000. He spends his entire budget on shoes and beers.The cost for a pair of shoes is $15 and the cost for can of beer is $25.i. Construct Andre’s budget constraint (place) beers on the y-axis. ii. Suppose Andre’s salary rises by 25%. Also suppose that the price ofshoes and beers each rise by 40%. Construct Andre’s new budget constraint. What is the difference between the new and old budgetconstraints? iii. Suppose that the price of beers fell from $25 per beer to $15. ConstructAndre’s new budget constraint. What is the difference between the newand old budget constraints.
- Maya divides her income between coffee andcroissanls (both of which arc normal goods). An earlyfrost in Brazil causes a large increase in the price ofcoffee in the U nitcd Stites.a. Show the eflcct ol the frost on Maya's budgetconstraint.b. Shm" the effect ol the frost on Maya's optinu,loonsumption bwl<ile assunling that the substitutioneflcct outweiglls the income effect for croiss:mls.c. Show the eflcct of the frost on Maya's optimalconsumption bw,dle assuming that the incomeeffect outweighs the substitution effect forcroissantsPROBLEM 2.25% PARTIAL DIFFERENTIAL LAGRANGE OPTIMIZATION In the era of the Covid 19 pandemic, we are required to consume lots of fresh fruits. The satisfaction of a consumer in consuming two kinds of fruit, namely Apples (X) and Oranges (Y) is: U = X3 Y2 income or budget to buy the two fruits is Rp. 250,000, the price of apples IDR 75,000/fruit and the price of oranges is IDR 25,000/fruit. a. How many apples and oranges must be obtained in order to achieve optimum satisfactionb. Calculate the optimum satisfaction value that can be achievedYou were promoted as the manager of a new Clean-Well Sanitary Store that sell cleaning andsanitation products wholesale. You recently read in an article that there the price of vitamins isexpected to increase by 20 percent. How will this affect your store’s sales of sanitationproducts?
- )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 17A student has a monthly budget of $120 to spend on eitherburritos, which cost $6 each, or sodas, which cost $4 each.1. What is the largest number of burritos that the studentcould afford to purchase in one month?2. What is the largest number of sodas the student couldafford to purchase in one month?3. Draw the student's budget constraint. Put burritos on thex-axis and sodas on the y-axis.Graded Assignment due Monday4. Which combinations of burritos and sodas are unaffordable--those tothe left of the line in the graph or those above the line in the graph? Why?5. Which combinations would leave some budget unspent - those to theleft of the line in the above graph or those to the right of the line in theabove graph?6. What is the equation for the student's budget constraint? In yourequation, use Q1 as the variable to represent the quantity of burritos andQ2 to represent the quantity of sodas.7. What is the opportunity cost of a burrito?8. What is the opportunity cost of a soda?9. The local…Transfer and revenue effect:The consumer gets positive benefits from consuming bread (B) and cake (K). Consumer utility is as follows: U(B,K) = 20·B2·K The price of bread is 200 ISK. but the price of a cake is 400 ISK. Consumer consumption is set restrictions as his income is ISK 20,000. Put cakes on x-axis and bread on pictures y-axis. a) Show the equation for the locating ratio of bread for one cake. Draw the equivalence curve on a graph and interpret what the equation position ratio says at each point in the equivalence process. b) Find the most efficient consumption combination and draw on the picture. c) The state decides to tax bread so its price rises to 400. Who is the most cost-effective consumption mix based on changing prices? Change change consumption patterns in the separate effects of displacement and income effects. Show the most efficient the consumption composition in the picture and differentiate the changed consumption due to price changes intransfer and income…