EDUCATION 2. Assume that you are deciding whether to acquire a four-year university degree. Your only consideration at this moment is the degree as an investment for yourself. Costs per year are tuition fees of $600 and books at $100. The government also pays to the university an equivalent amount to your tuition fees to cover the real cost. If you didn't go to university, you could earn $6,000 per year as an acrobat. With a university degree, however, you know that you can earn $10,000 per year as an acrobat. Because of the nature of your chosen occupation, your time horizon for the investment decision is exactly 10 years after university; that is, if the investment is to be worthwhile, it must be so within a 10-year period after graduation. The market rate of interest is 5 percent. Would you make the investment in a degree?

8. Suppose that you have a big test on Monday and you plan to spend the weekend studying. On Saturday, your friend invites you to spend the day at a water park. It's the last weekend that the park will be open for the year. You'd really like to go to the park, but you're worried that you won't have enough time to study on Sunday. What are the possible tradeoffs of each choice-going to the water park or staying home to study?

Potatoes cost Janice .50 per pound, and she has $5 that she can spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third is worth $1.05, and all subsequent pounds are worth .30 per pound. How many pounds of potatoes will she purchase? How many pounds would she purchase if she only had $2 to spend?

Karan and Arjun work for a political campaign for 20 hours each per week. It takes Karan 2 hours to make a poster and 5 hours to write a memo. It takes Arjun 4 hours to make a poster and X hours to write a memo. The campaign needs 10 posters this week, and as many memos as possible. Since Karan is faster at making posters, he should be assigned the task of making posters.

You have a field on which you can grow two types of crops, barley and wheat. The field has 30 acres and each acre can produce 2 wheat or 3 barley. Suppose you are producing 60 barley and it is economically efficient for you to do so. How much wheat are you producing? 5 wheat 10 wheat 15 wheat 20 wheat

a) The s utility function is given as follows: U(z,y) = x+y The budget-constrained of 8 in spending money on the watching cricket match and movies as follows: 845x + 36y= 324 Now the utility function for finding the optimal bundle of preferences The bundle of a and y is under budget Now the Bundle of (x, y) is (2, 2) 45(2) 36(1) 45x + 36y= 324 36(2) 324 324 162 < 324 The MRS is one means to get an additional unit of zone unit of y will sacrifice and to get one additional unit of y, one unit of z will sacrifice. The budget line explain if (x, y) is (1, 1) 45(1) then = 324 $81 < 324 Now the Bundle of (x, y) is (3, 3) 90+72 Now the Bundle of (x, y) is (4,4) 45x+36y 324 45(3) 36(3) 324 135+108 324 243 < 324 = U(x, y) = x+y dU 45x + 36y= 324 45(4) 36(4) 324 180+144 324 324 324 = 1 dz MU2=1 du dy MUy=1 MRS MUT Pz MUY Py MRS=1 =1 MU MUy So the optimal bundle for S is 4 unit of z and 4 unit of y that is (4,4).