Question 1: What does it mean for two goods to be perfect substitutes? Question 2: Represent the preferences of the following people graphically: Case 4: Carl hates studying. Let x denotes hours studying econ and y denote hours studying math. An hour studying math is as bad as an hour studying econ.

A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: Qd =25,000-5,000P+ 25M Q=240,000+ 5,000P-2,000P, where Pis price. Mis income, and P;is the price of a key input. The forecasts for the next year are M-$15,000 and P, $20. Average variable cost is estimated to be AVC-14-0.008Q+0.0000020² Total fixed cost will be $6,000 next year. Suppose that income for next year is forecasted to be $9,000 instead. What is the profit-maximizing output choice for the firm?

The demand for a product of Carolina Industries varies greatly from month to month. The probability distribution in the following table, based on the past two years of data, shows the company's monthly demand. Unit Demand Probability 300 400 500 600 0.20 0.30 0.35 0.15 (a) If the company bases monthly orders on the expected value of the monthly demand, what should Carolina's monthly order quantity be for this product? (b) Assume that each unit demanded generates $70 in revenue and that each unit ordered costs $50. How much will the company gain or lose in a month (indoitars) if it places an order based on your answer to part (a) and the actual demand for the item is 300 units?