Ralph and Graham have identical utility functions, U(x, y) = x² + y². There are 10 units of x and 10 units of y to be divided between them. a. What are the fair allocations in this case?
Q: On September 12, Jody Jansen went to Sunshine Bank to borrow $2,600 at 10% interest. Jody plans to…
A: Interest is the cost of borrowing money, usually expressed as a percentage of the amount borrowed,…
Q: A cottage industry exists in the home-manufacture of ‘country crafts’. Especially treasured are…
A: A cottage industry exists Time taken by the fourth to complete quilt (c1) = 30 hours Time taken by…
Q: Which of the following could be the price elasticity of demand for a good for which a decrease in…
A: Price elasticity is the percentage change in quantity demanded due to change in price.
Q: 4 Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes…
A: Game theory is a branch of mathematics that studies decision-making in situations where two or more…
Q: Bob has a utility function U(x, y) = √√x₁ +0.8√x2 +0.64√√x3 over his incomes x1, x2, x3 in the next…
A: Utility function: The utility function shows all those consumption bundles that give the quall level…
Q: What is personal income? What are the sources of personal income
A: Introduction The term "income" often refers to the total sum of cash, assets, and other value…
Q: Over many years, small differences in growth rates can have large effects on the level of income.…
A: Gross Domestic Product (GDP) represents the total monetary value of all goods and services produced…
Q: Paula sells boomerangs. The price elasticity of demand for boomerangs is 0.54. If Paula wishes to…
A: Price elasticity of demand refers to percentage change in quantity demanded with respect to the…
Q: b)increase, does not change, increases, increases
A: I thought that answer was B; please correct me if I am wrong. So my thinking was an increase in job…
Q: Suppose the money market for some hypothetical economy is given by the following graph, which plots…
A: The money demand curve illustrates the quantity of money demanded at each interest rate, keeping…
Q: 5. Consider a game with the following payoff table for player 1: Strategy Player 1 1 2 3 1 3 -4 1…
A: Given the pay-off matrix: Player 2 1 2 3 Player 1 1 3 -3 -2 2 -4 -2 -1 3 1…
Q: Assume that the market for unskilled workers is perfectly competitive and that the demand for…
A: Disclaimer: - Since you asked multipart question, we are solving only 3 subparts as per guidelines.…
Q: Draw a well labeled graph (similar to graph 10.3 on page 283 from textbook) showing the point of…
A: The extra output that is created when one more unit of labour is employed while keeping all other…
Q: What is the difference between 'grim trigger' and 'tit-for-tat' in the context of the repeated…
A: The classic game theory illustration of the tension between individual and group rationality is the…
Q: XYZ Co. makes a processor that requires a metal that can only be found in a single mine in Peru. Do…
A: The price elasticity of supply is a metric that measures how responsive a given good's quantity is…
Q: The figure given below shows the national market for mopeds in a small country. Da and S are the…
A: In economics, deadweight loss is the difference in production and consumption of any given goods or…
Q: Compute for the Effective Interest Rate Payment Period = Quarter 1. 10% Compounded Yearly = Blank 1…
A: The real interest rate that is earned or paid on a loan or investment after compounding is known as…
Q: (v) To minimise cost, Woodmaster would choose K = 4 x and L=-1 x (vi) Minimum cost to produce Q=0.5…
A: The value of Labour at Quantity after the downturn has been calculated wrongly. Therefore, the cost…
Q: In the line of corruption and scams, explain the three layers of Money laundering. What is…
A: The act of making unlawfully obtained monies look legitimate is known as money laundering. It…
Q: In 2013, Prussia's aggregate demand curve was determined by the equation M + = 8% A change in…
A: Aggregate demand is the total demand for goods and services in an economy over a specific period of…
Q: Click on the icon to read the news clip, then answer the following questions. The graph shows the…
A: Price control is a government-imposed economic strategy that establishes minimum price or price…
Q: demand and the elasticity of supply values are respectively Ed* = -6.6 and Es* = 4.1 Suppose the…
A: The price elasticity of demand or supply computes the proportionate change in quantity demanded or…
Q: For the following events, explain the short-run and long-run effects on output and the price level,…
A: The graphic shows the Canadian economy with initial equilibrium at E. Price level PO and output…
Q: Explain the characteristics of mixed economy???
A: A Mixed economy framework is a mix of both entrepreneur and communist goals permitting security of…
Q: 3. Suppose there are ten identical firms in an industry. The cost function for each firm is: 1 c(y)…
A: C(y) = 12y2+wywhere y = firm's outputw = wage rate Wage rate (w) = 1.9Qswhere Qs = Industry Output
Q: Cournot’s Model of Duopoly) Joe and Rebecca are small-town ready-mix concrete duopolists. The market…
A: Cournot duopoly is defined as the market scenario in which two producers simultaneously choose the…
Q: Costs, P $5 P = $2 MC ATC -MR Q 30 In the above perfectly competitive firm what is the total…
A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…
Q: Which of the following descriptions of government revenue is correct? Check all that apply.…
A: The term "government revenue" describes the sums of money that the government receives from a…
Q: Ed opened a savings account 5 years ago with $600. The account earns 3% simple interest per year,…
A: Interest is the amount that is earned on the principal amount by an individual. There are two types…
Q: QUESTION 8 Every year for 10 years starting year 2, you deposit $2000 in a savings account that…
A: We must compute the total of the current values of each deposit in order to determine the present…
Q: True/ False International trade can leads to a enhancement in the product available for the…
A: International trade refers to the exchange of goods and services across borders or between…
Q: The establishment of a new government affect the economy in various ways. Explain how the economy…
A: A collection of people or organizations that wield political power and control over a certain region…
Q: The graph below plots the unemployment rate over time from the start of the Great Recession. Click…
A: Unemployment is a situation when individuals are not employed in any form of economic activity,…
Q: Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate…
A: In this case, we have to discuss natural rate of unemployment here. Natural rate of unemployment is…
Q: You have been tasked with developing a research report based on an economy of your choice anywhere…
A: Demand refers to the amount of a product or service that buyers are willing and able to purchase at…
Q: Producer surplus is defined as options: 1-The area above MC and above the price of output 2-The…
A: The producer surplus is the difference between the actual price a producer receives and minimum…
Q: This question is in the context of the Becker model. Suppose Firm A and Firm B sell their output in…
A: The Becker model, also known as the theory of discrimination, is an economic model developed by…
Q: Subsidies: Governments can provide subsidies to businesses that are most affected by the supply…
A: Subsidies are relaxation provided by the government by paying a share in the cost.When the oil…
Q: Suppose an economy is in long-run equilibrium. The central bank raises the money supply by 5…
A: AD-AS equilibrium: Aggregate demand refers to the total demand for commodities and services made by…
Q: Scooter's Scooters is a large American manufacturer of electric scooters operating out of Boise.…
A: Scooter's Scooter is an American scooter-producing firm. Currently, the firm is producing all of its…
Q: Consider an industry with identical firms. Suppose the cost function of firm i, i=1,...,n, is given…
A: C = 6q2 + 91
Q: c. What do you expect its price to be one year from now? (Use intermediate values rounded to 4…
A: * SOLUTION :- From the above information the calculation is given as below
Q: In the classic Bertrand model of oligopoly (e.g., a duopoly with no capacity constraints, product…
A: Bertrand Model refers to the oligopoly model where the firms compete on the basis of price.…
Q: a) Solve for the Net Present Value of the alternatives A and B using interest rates from 0% upward.…
A: Net present values refers to the discounted values of the future cash flow .
Q: Explain the elasticity and total revenue with the help of graph? please answer with the help of…
A: Most purchasers are price sensitive in most markets, and it is assumed that if a good or service is…
Q: 18. Tony is currently operating a small newsstand. Unsold newspapers will be returned to the…
A: 18) The actions and procedures used by organizations to produce their goods and services are known…
Q: Kate's money income is $350, the price of X is $4, and the price of Y is $6. Given these prices and…
A: Marginal Rate of Substitution (MRS), which is the rate at which a consumer is willing to trade one…
Q: Are Free Trade Agreements (FTAs) fair? And why you think so?
A: Free trade refers to the economic practices where trade barriers are either reduced or eliminated to…
Q: 1. A Volvo car dealer wishes to sell a 1995 Volvo 740 GLE to a customer for $10,000.00 which…
A: Price of a car = 10000 a down payment = 20% so the loan amount is 80% of the price =…
Q: Dahlia gives a presentation on the Industrial Revolution and focuses on its impact on air and water…
A: Dahlia examines the effects of human activities on the natural world and how these effects can have…
Step by step
Solved in 2 steps
- 3. Anita (A), Ben (B) and Carlos (C) are housemates who have moved to a new house and must decide how to allocate rooms X, Y and Z. An 'allocation' is where each housemate is assigned to exactly one room. For example, Anita → Room Z, Ben → Room X and Carlos → Room Y is allocation (Z, X, Y). Utilities for each room are given below: Utility for A Utility for B Utility for C Room X 7 9 2 Room Y 4 3 7 Room Z 2 1 4 (a) How many possible allocations are there in total? (b) Identify the two allocations which are not Pareto optimal and explain why they are not Pareto optimal. (Hint: is the allocation (Y,Z,X) Pareto optimal?) (c) Suppose we square Carlos' utility from each room (i.e. uc (Z) becomes 16). Would the set of Pareto optimal outcomes change? Why/why not? (d) Returning to the utilities from part (a), which of the Pareto optimal allocations maximise total surplus (utility) and would all housemates weakly prefer this allocation over any other? (e) Suppose the housemates decide to…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.Matt has $14 to spend on fruit today at the grocery store. The only fruits he likes are apples and oranges. Both cost $2 per pound. Matt's preferences between these fruits are presented in the table below. How many apples and oranges will he buy if he were a utility maximizer? a b с Pounds of Apples 1 2 3 4 5 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. d Pounds of Oranges 1 2 3 4 5 Apples = 1 pound, Oranges = 2 pounds Apples = 2 pound, Oranges = 5 pounds Apples = 1 pound, Oranges = 1 pound Marginal Utility from Apples Apples = 3 pounds, Oranges = 3 pounds. 200 300 380 440 480 Marginal Utility from Oranges 100 200 250 280 300
- If the initial distribution of two goods between two people is Pareto optimal, which of the following statements is TRUE? A. It is possible to reallocate the goods between the two people so as to increase the utility of both people. B. It is possible to reallocate the goods between the two people so as to increase the utility of one person without decreasing the utility of the other. C. It is possible to reallocate the goods between the two people so as to increase the utility of one person, but only at the expense of the other person. D. It is impossible to reallocate the goods between the two people so as to increase either person's utility. E. None of the above5. Sheila and Bruce are taking a canoe trip. Sheila brought 10 boxes of peanuts (x) and 15 bags of chips (y). Sheila's utility function is U*(x,y) = lnvx*+ Invy°. Bruce also brought 20 boxes of peanuts and 5 bags of chips. Bruce's utility function is UB(x.y) = min[x', y'I. a) Illustrate the endowment point and draw a sample set of indifference curves through the endowment point. b) If Sheila and Bruce trade what will be the pattern of mutually beneficial trade? c) If the terms of trade are the number of bags of chips (y) per box of peanuts (x) then what is the largest value that these terms can be for a mutually beneficial trade in this economy? d) Find one mutually beneficial trade where the terms of trade are 1 bag of chips (y) per 2 boxes of peanuts (x). Suppose that Sheila and Bruce set up two competitive markets for peanuts and chips. Below you will show that if the price of peanuts (x) is $1 and the price of chips (y) is $2 then the markets for both peanuts and chips will clear.…What do you mean by complementary goods give two examples of the goods which are complement to each other?
- Explain and differentiate preference and utility.Five consumers have the following marginal utility of apples and pears: The price of an apple is $1, and the price of a pear is $2.Which, if any,of these consumers are optimizing over their choice of fruit? For those who are not,how should they change their spending?Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays the $20 entry fee. Biff realizes there is very little chance that he will actually win the contest. He just likes the idea of being able to eat all the hot dogs he wants. The table below shows Biff’s utility from eating hot dogs. a. Use the table below and fill in the values for marginal utility. Hot Dogs and Biff's Utility Hot Dogs Total Utility (utils) Marginal Utility (utils) 5 48 — 6 52 7 54 8 55 9 54 10 51 b. Use the table to graph Biff's total utility and marginal utility for hot dogs. c. If Biff is rational, and has no intention of winning the hot dog eating contest, what is the optimal number of hot dogs he will eat? What is the maximum level of utility Biff can reach from eating that number of hot dogs? Optimal number of hot dogs: Maximum utility:
- Please Show ALL Workings VERY CLEARLY! marginal utilityExplain the cardinal and ordinal utility approach ?Michael derives utility from only two goods, hamburger (Qh) and fanta (Qf). The marginal utility that Michael receives from cake (MUh) and donuts (MUH) are given as follows: MUh = Qd MUf = Qh Michael has an income of R500 and the price of hamburger (Ph) and fanta (Pf) are both R100. What is Michael's budget constraint? (1) Select one: a. 500 = 100Qh + 100Qf b. 500 = 100PH+ 100PF c. 500 = (Ph)(Qf) d. 500 = (QhXQf).