I need help with this homework problem. Suppose there are two consumers, A and B. The utility functions of each consumer are given by: UA(X,Y) = (X^1/2)*(Y^1/2) UB(X,Y) = X + Y The initial endowments are: A: X = 8; Y = 3 B: X = 4; Y = 5 What is the marginal rate of substitution for consumer A at the initial allocation? What is the marginal rate of substitution for consumer B at the initial allocation? Is the initial allocation Pareto Efficient?
Q: The graph below shows a production possibilities frontier for shoes and candy bars in Z-land. Using…
A: Production is a term in economics that determines the most effective way for integrating resources…
Q: With the biting economy and dwindling levels of income, many Microfinance clients have been affected…
A: Microfinance institutions (MFIs) are financial institutions that provide financial services, such as…
Q: Government purchases 30 Consumption 100 Investment spending 50 Exports 40 Imports 90 Wages Interest…
A: Standard national income estimates may be used to investigate the factors that impact economic…
Q: 2. There are n ≥ 2 profit-maximising firms producing a homogeneous good, competing in quantity, and…
A: The economics of businesses is the study and analysis of business finances via the abstracting of…
Q: find (i) pure nash equillibrium, (ii) pure subgame perfect equillibrium and (iii) mixed strategy…
A: A subgame is a concept used to examine how players engage strategically in sequential games. It is…
Q: Expected rate of retur ✓ (Click for List) The increase in profit of a firm anticipates it will…
A: The expected rate of return is the estimated profit or loss an investor foresees from an investment,…
Q: 1. Consider the following two-player simultaneous move game, given in strategic form game by the…
A: A Nash equilibrium is what is going on in game hypothesis where no player has any motivating force…
Q: Complete the following table by calculating the negative tax and total after-tax income for each…
A: It can be defined as a policy of the government in which Any individual or family in the economy has…
Q: 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0 0 Demand I I I I 5 MR 40 15 20 25 30 35 QUANTITY…
A: Oligopoly is a form of market where there is only a limited number of firms or suppliers who have a…
Q: Analise the behaviour of these variables; GDP per capita, unemployment and inflation, for Trinidad…
A: Trinidad and Tobago's economy has experienced significant changes in the past five years. The…
Q: ulation of coal falls solely under provincial jurisdiction because it is a natural resource. Select…
A: It can be defined as the areas of authority or responsibility which come under the provincial…
Q: Wage productivity productivity Wage productivity Wage. productivity Oc) Od) VMP, productivity None…
A: The study of how people, corporations, and government officials make employment decisions is known…
Q: F 180= FS 160 F4 140 = F3 120= F² 110 F1 O 1 Figure 1 Production Possibilities Curve (PPC) --t V W…
A: Production Possibility Curve of PPC shows the different combinations of two goods that can be…
Q: Markets would be inefficient if irrational investors. a. existed; unlimited O b. did not exist;…
A: Markets would be inefficient if irrational investors ___________ and actions of arbitragers were…
Q: Suppose that Betty's Beads is a typical firm operating in a perfectly competitive market. Currently…
A: In a market with perfect competition, there are lots of sellers providing similar goods. As price…
Q: Sarah has a utility function expressed as the square root of wealth (w). Currently, Sarah has an…
A: Utility function measures and describe the preference of Consumer over goods , services ,wealth and…
Q: The figure below shows a consumer maximizing utility at two different prices (the left panel) and…
A:
Q: The college is looking to increase parking revenue by changing the price of parking permits from $40…
A: Elasticity is a concept used in economics to measure the responsiveness or sensitivity of one…
Q: Q2B. i) Consider two marginal abatement cost curves (MAC) for a single firm. MAC, represents the…
A: Marginal Abatement Cost (MAC) refers to the cost of reducing one additional unit of greenhouse gas…
Q: he discount rate should be chosen when analyzing an investment project using Net Present Value…
A: The discount rate is a financial idea that's utilized to decide the present value of future cash…
Q: Suppose that you have five consumption choices: good #15. An indifference surface is the set of…
A: Consumer maximizes their utility by spending their income on different goods and services at a point…
Q: 100 300 200 120 100 100 220 320 400 500 580 MC ATC AVC Refer to the above Figure A. In the short-run…
A: AVC stands for "Average Variable Cost" which means the cost incurred by a firm to produce one unit…
Q: 2. Assume a Hawk -Dove game with the following payoff matrix, where the first entry is Animal A's…
A: Nash equilibrium is the point of a game corresponding to which each participant optimizes his…
Q: Maximum Feasible Hourly Production Rates (in Tons) of Either Knives or Forks Using All Available…
A: Opportunity cost is the value of next best alternative which has been forgone whenever a particular…
Q: Consider two firms, referred to as firms 1 and 2, who compete in a market by choosing quantities…
A: Demand function : P (Q) = 10 - 2Q Marginal Cost of each firm = 4 Number of firms in the market is 2…
Q: Question 1.12: Taxes on labor income The government lowers the tax rate on labor but government…
A: Taxes on labor influence the incentive of a worker. Imposing taxes reduces the scope of the business…
Q: Please no written by hand and no emage Your company, which specializes in running shoes for men who…
A: The demand function of BalderDash shoes Q=a+bP+cM+dRHere P = Price of shoes, M denotes consumer…
Q: Consider the following 2-player game with incomplete information U D L (0. y) (-1, y) R (1, 2) (0,0)…
A: According to the game theory concept's BNE, each player's strategy is optimal given their personal…
Q: Milliken uses a digitally controlled dyer for placing intricate and integrated patterns on…
A: To find the Present worth , Annual Worth & Internal Rate of Return we first compute the After…
Q: barely enough room for customers to stand and wait, let alone the three paza avans necessary to keep…
A: Total cost is equal to the sum of total variable cost and total fixed cost. Total variable cost is…
Q: Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled…
A: Corporate economics is focused on the investigation and analysis of corporate finances through the…
Q: Write detailed notes on community economic analysis
A: Community economic analysis refers to the systematic study and evaluation of economic conditions,…
Q: What is our decision for a goodness-of-fit test with a computed value of chi-square of 1.273 and a…
A: The null hypothesis is a fundamental concept in statistical hypothesis testing. It is a statement or…
Q: An investor has a von Neumann-Morgenstern utility function, u(c)=-e^(-αc), where c represents…
A: In economics, uncertainties are unforeseeable components that could affect socioeconomic…
Q: ndix A Chapter 7 Consider an economy of three-period-lived people in overlapping generations. Each…
A: Depreciation:-When a currency's value in a floating exchange rate declines. This is the result of…
Q: What are possible adaptation strategies to reduce risk when entering a new market? Drag the answers…
A: Development assistance refers to support, guidance, or and provided by external organizations,…
Q: Which of the following are necessary in order for price discrimination to occur?. a downward sloping…
A: Monopolist: A monopolist is a single seller in the market and hence he faces the downward sloping…
Q: 5. Consider the Phillips curve πt = πt-1 – 0.5(ut – 0.01). a) What is the natural rate of…
A: As previously indicated in the Phillips curve equation πt = πt-1 – 0.5(ut – 0.01), we can find the…
Q: Free Markets are a way of connecting people who may mutually benefit by exchanging goods and…
A: One potential local/global problem which can arise from an monetary coverage solely primarily based…
Q: A small company purchased now for $23,000 will lose $1,200 each year for the first 4 years. An…
A: a) PW(i%) = -23,000-1,200 (P/A, i%, 4) - 8,000 (P/F, i%, 4) + 5,500 (P/A, i%, 11)(P/F, i%, 4) +…
Q: If the production function for a company is given by z = 360x^2/5 y^1/3 , where x is the company’s…
A: Marginal productivity refers to the additional output generated by using one extra unit of input…
Q: 3. Briefly explain whether production of each of the following goods is likely to fluctuate more or…
A: A significant, continuous, and protracted decline in economic activity is referred to as a…
Q: explain any five ways through which the government of Zimbabwe has been supporting entrepreneurs
A: Government support refers to the various actions, programs, and policies implemented by a government…
Q: ains why they do not always follow the normative theories dictate that they should. 1. Expected…
A: It can be defined as the blueprint for the models that represent how people should have to make…
Q: 5. We'll now show how a college degree can get you a better job even if it doesn't make you a better…
A:
Q: Labor market pooling from a cluster of firms can workers O decrease: decrease O decrease increase O…
A: A labor market is the framework through which employers and workers communicate and settle on the…
Q: Write an essay on the theory of the firm
A: The theory of the firm, a microeconomic idea in neoclassical economics, asserts that a firm exists…
Q: The cost data in the following table are for Marshall’s Meats, a perfectly competitive firm. Round…
A: Perfect competition is market where there are very large number of firms . All firms are identical…
Q: following figure represents a hospital facing both private and Medicare ients. Please use the graph…
A: Concept of Cost-Shifting: Cost-shifting refers to a situation where one party shifts or transfers…
Q: Ann, Bob, Carl, Dora, Eddy and Frank are the contestants in a new TV show. They are placed on an…
A: Backward induction game, also known as backward induction reasoning, is a concept in game theory…
Step by step
Solved in 4 steps
- Suppose that David and his friend Wilson derive utility from consuming two types of snacks: onion rings (9₁) and chips (9₂). The utility function for each individual is U (9₁, 92) = 9192. Their indifference curves for these two goods are assumed to have the usual (convex) shape. Suppose David has an initial endowment of 35 onion rings and 10 chips, and Wilson's initial endowment consists of 5 onion rings and 20 chips. (1) Draw an Edgeworth box and show the initial allocation of goods, to be labelled e. Indicate the initial quantities of each person's goods on the four axes.Refer to figure. Suppose the consumer is endowed with 10 units of orange and consumes 5 units of apple. The price of the apple decreases and at the new price the consumer consumes 9 units of apple. The change in the demand for apples due to the endowment effect is equal to_____A and B consume only two goods, cider (C) and dumplings (D). A has an initial endowment of 10 bottles of C and 30 of D. Bob has an initial endowment of 50 bottles of cider and 50 dumplings. Alice’s utility function is uA(CA,DA) = 9ln(CA) + 10ln(DA), where CA and DA represent consumption of C and D, respectively. B’s utility function is uB(CB,DB) = CBXDB, where CB and DB denote B's consumption of C and D. a) Find the competitive equilibrium, i.e. the price ratio, of this exchange economy and the resulting equilibrium allocation. b) Find the expression of the contract curve for this economy and use your answer to check that the equilibrium allocation you found in (b) is indeed Pareto optimal.
- 4. Aaron and Burris have the following utility functions over two goods, x and y. Aaron’s utility function: UA(xA, yA) = min{xA/3, yA} Burris’s utility function: UB(xB, yB) = 9xB + 3yB Aaron’s endowment is eA = (2, 4). Burris’ endowment is eB = (10, 8). In an Edgeworth Box diagram, show which allocations are in the core. Solve for the set of Pareto optimal allocations (i.e. the contract curve) in the Edgeworth Box. Illustrate the contract curve in an Edgeworth Box diagram. Let good y be the numeraire (i.e. set py = 1 and let px = p). Solve for the Walrasian competitive equilibrium allocation and price ratio.3. Christina loves pizza and hates burger. Her utility function is U(p – b) = p – 6", where is the number of pizzas she consumes and b is the number of burgers she consumes. John likes both pizza and burger. His utility function is U(p, b) = p + 2\b Christina has an initial endowment of no pizzas and 8 burgers. John has an initial endowment of 16 pizzas and 8 burgers. a. Graph the initial endowment and label it E b. If Christina hates burgers and John likes them, how many burgers can Christina and John be consuming at a Pareto optimal allocation? What is John's marginal utility for pizzas and burgers? Mark the locus of Pareto optimal allocations of pizzas and burgers between Christina and John on the grapsh above.III. First Welfare Theorem: Suppose we have an endowment economy with two consumers i = 1,2. Let e' = (1,1) be the endowment for both consumers. Let preferences be given by U'(x', y'; x²) := (x'y')'/² + 7x² and U²(x², y²; y') := (x²y²)/2 + 7y'. When maximimizing utilty each consumer takes the others choices as given. Show that p* = (1, 1) is a competitive equilibrium where each consumer demands her own endowment. Find a feasible allocation that is a Pareto improvement. Why does the first welfare theorem not apply?
- Jack Sparrow and his wife consume wine (W) and books (B). Jack Sparrow's utility function is Ujack(W, B) = W. His wife's utility function is Uwife(W, B) = B. Jack's endowment is 17 bottles of wine and 5 books and Jack's wife's endowment is 20 bottles of wine and 14 books. In the Edgeworth box, Jack's consumption is measured from the lower left corner, and his wife's from the upper right corner of the box; the wine is on the horizontal axis and books are on the vertical axis. Therefore, in an Edgeworth box for Jack and his wife, there is only one Pareto Optimal allocation that is located in the top left corner of the box. True or False? Please submit 1 if True and O if False.John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where J B. b. C < J. c. C = J. d. C = B. e. JA possible explanation for the indecency might be the fact that the consumers are not all alive at the same time and therefore some mutually advantageous trades cannot occur. Consider an economy where consumer t receives an endowment of 1 unit of the single consumption good at time t and obtains utility only from consumption at times t and t + 1. All consumers meet at time 0 to trade. What is the equilibrium? Is exigency restored?Bill is the only person on an island, and he has an endowment of 20 units of coconuts (C) and 5 units of water (W). His utility function is: U(C, W) = In(C)+2 ln(W) a) Find the marginal utility of C and W. b) Find the marginal rate of substitution when Bill consumes all of his endowment.John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where ] B. b. C < J. c. C = J. d. C = B. e. JRefer to figure. Suppose the consumer is endowed with 10 units of orange and consumes 5 units of apple. The price of the apple decreases and at the new price the consumer consumes 9 units of apple. The change in the demand for apples due to the endowment effect is equal to Optionsa) 3b) 4c) 1d) none of theseSEE MORE QUESTIONSRecommended textbooks for youPrinciples of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSONPrinciples of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-…EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill EducationPrinciples of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSONPrinciples of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-…EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education