Answer e and f only please 135. Many elderly people have Social Security payments as their sole source of income. Because ofthis, there have been attempts to adjust these payments so as to keep up with changing prices.This process is called "indexing"; this question will lead you through the process. Supposethat in the year 2000, a typical Social Security recipient consumed only Food and Housing.The price of housing was $15/unit and the price of food was $5/unit. Denote the quantities offood and housing per month by F and H respectively. This consumer received $150/month andconsumed five units of housing and 15 units of food."14Show your work for each of the following parts(a) Write down the algebraic representation of this consumer's budget constraint.(b) Show that the bundle (5, 15) is just affordable. Identify another bundle on the budget.constraint where both goods are consumed in positive amounts. Suppose that in 2004 theprice of food rose to $10/unit and housing rose to $20/unit.(c) How much additional income is required such that the original bundle is just affordable atthe new prices.(d) On the graph with Housing on the horizontal axis and food on the vertical axis, depictthe original budget constraint and the new budget constraint after income is compensatedaccording to c. Include the indifference curve going through the point (5,15).(e) Is the consumer better, worse, or equally well off in 2004 relative to 2000 following thecompensation? Explain. What will happen to the consumer's choice of food and housingconsumption? How can you tell?(f) The Laspeyres Price Index, as we have been describing above, measures inflation by lookingat how the cost of a particular bundle of goods a consumer purchases in a previous yearchanges. Critics claim that this measure of inflation overstates changes in the cost of living.Do you agree or disagree? Explain.

The majority of firms have a limited budget for purchasing goods and services. As a result, they…

Write down the algebraic representation of this consumer's budget constraint. Show that the bundle (5, 15) is just affordable. Identify another bundle on the budg constraint where both goods are consumed in positive amounts. Suppose that in 2004 tl price of food rose to $10/unit and housing rose to $20/unit. How much additional income is required such that the original bundle is just affordable the new prices. -) On the graph with Housing on the horizontal axis and food on the vertical axis, depi- the original budget constraint and the new budget constraint after income is compensate according to Include the indifference curve going through the point (5,15).

Write down the algebraic representation of this consumer's budget constraint. Show that the bundle (5, 15) is just affordable. Identify another bundle on the budg constraint where both goods are consumed in positive amounts. Suppose that in 2004 tl price of food rose to $10/unit and housing rose to $20/unit. How much additional income is required such that the original bundle is just affordable the new prices. -) On the graph with Housing on the horizontal axis and food on the vertical axis, depi- the original budget constraint and the new budget constraint after income is compensate according to Include the indifference curve going through the point (5,15).

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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