Angela's reservation indifference curve, IC, After the new law Bruno 12 gets rent EF Can Angela be better off, without reducing Bruno's rent? 8. IC, D' Feasible frontier: Angela and Bruno combined 16 20 24 Angela's hours of free time a) Angela works farmland owned by Bruno. Use the framework above and a test for Pareto efficiency to establish that points on the line EF are not Pareto efficient while points on the line CD are. b) Given that Angela and Bruno achieve a Pareto optimum explain briefly why the division of output may not be equitable. Bushels of grain

Angela's reservation indifference curve, IC, After the new law Bruno 12 gets rent EF Can Angela be better off, without reducing Bruno's rent? 8. IC, D' Feasible frontier: Angela and Bruno combined 16 20 24 Angela's hours of free time a) Angela works farmland owned by Bruno. Use the framework above and a test for Pareto efficiency to establish that points on the line EF are not Pareto efficient while points on the line CD are. b) Given that Angela and Bruno achieve a Pareto optimum explain briefly why the division of output may not be equitable. Bushels of grain

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Solve and Explain Q#40 and 41
11. Angela's reservation indifference curve, IC, • After the new law Bruno 12 gets rent EF • Can Angela be better off, without reducing Bruno's rent? Feasible frontier: Angela and Bruno combined 16 20 24 Angela's hours of free time a) Angela works farmland owned by Bruno. Use the framework above and a test for Pareto efficiency to establish that points on the line EF are not Pareto efficient while points on the line CD are. b) Given that Angela and Bruno achieve a Pareto optimum explain briefly why the division of output may not be equitable. Bushels of grain
Roxy has 6 pencil cases and 18 notebooks. In contrast, Bratt has 18 pencil cases and 8 notebooks. Roxy's marginal rate of substitution [MRS] for notebooks is 6 and Bratt's MRS is 4.Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. Show answer with an economic perspective.
gets budget line compare to the original one? 2. Sketch the budget constraint for a prisoner at the general penitentiary who has been smuggled a pack of cigarettes (with 20 cigarettes) if one cigarette can be traded for two cell-phone calls. Consider the consumption bundles indicated on the 940
Assume that Raymond has $ 37.00 to spend on pretzels and beer. The price of pretzels is $3.00 and the price of beer is $5.00. Marginal utilities for each good are given below. Units MU P MU P / P P MU B MU B / P B 1st 18 6 40 8 2nd 15 5 30 6 3rd 12 4 25 5 4th 9 3 20 4 5th 6 2 15 3 6th 3 1 5 1 What Quantity of pretzels will Raymond purchase?
Sean and Yvette are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest. Barley Alfalfa (Bushels per acre) (Bushels per acre) Sean 40 8 Yvette 28 7 On the following graph, use the blue line (circle symbol) to plot Sean's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Yvette's PPF.
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Allison has a golden goose that will lay an egg every year until forever. The first egg will be out next year, and each egg is worth $500. Allison's friend, Eric, offers a price to buy the golden goose from Allison today. The interest rate is 10%. From the cost-benefit analysis, under which of the following offers would Allison be willing to sell the goose to Eric? O A $4,500 B. $5.500 C. Allison would want to sell it to Eric with both $4,500 and $5.500. D. Allison wouldn't want to sell it anyway since the eggs would be laid out forever.
6. In an Edgeworth box for two consumers, A and B, with endowments of commodities Xa and d Ya are A's endowments, Xb and Yb are B's, and Xo = Xa + Xb, Yo = Ya + Yb), the competitive equilibrium allocation of the two commodities represents a mutual tangency of both consumers' indifference curves with each other and with a common budget line. (a) The conditions require that A and B consume at a point on their budget lines where their indifference curves have the same marginal rate of substitution. and equilibrium for the market as a whole requires that the sum of the individuals' demands for each commodity must equal the totals (Xo and Yo) available. Mathematically express the point of equilibrium, that is, express the above statement with equations in relating each endowments, equilibrium points (Xa, Xb, Ya, Yb), and totals ((Xo, Yo).
Assume that Raymond has $ 37.00 to spend on pretzels and beer. The price of pretzels is $3.00 and the price of beer is $5.00. Marginal utilities for each good are given below. Units MU P MU P / P P MU B MU B / P B 1st 18 6 40 8 2nd 15 5 30 6 3rd 12 4 25 5 4th 9 3 20 4 5th 6 2 15 3 6th 3 1 5 1 If Raymond is maximizing his utility, then
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