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22. Cameron's preferences can be represented by the utility function u(X, Y) = X0.2y04, If the market prices are px = 1 and py = 1, what is Cameron's optimal mix of goods X and Y? a. X= Y b. X= 2Y c. 2X = Y d. X = 4Y e. 4X = Y

22. Cameron's preferences can be represented by the utility function u(X, Y) = X0.2y04, If the market prices are px = 1 and py = 1, what is Cameron's optimal mix of goods X and Y? a. X= Y b. X= 2Y c. 2X = Y d. X = 4Y e. 4X = Y

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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22. Cameron's preferences can be represented by the utility function u(X,Y) = X02y04 If the market prices are px = 1 and py = 1, what is Cameron's optimal mix of goods X and Y? a. X= Y b. X = 2Y с. 2X %3D Y d. X= 4Y e. 4X = Y 23. Which of the following will is most likely to lead to a decrease in the market price of nuts? a. The cost of hiring nut pickers decreases. b. Nut butters and jelly are complements, and the price of jelly decreases. c. The New England Journal of Medicine reports that people who eat two ounces of nuts per day live five years longer than those that do not. d. A devastating flood occurs on nut farms in California, destroying many nut trees in the process. e. None of the events above will cause the market price of nuts to decrease. Price 70 p° = 53 P= 50 p = 48 10 D 70 80 24. The graph above depicts the effect of a $5 per unit (excise) tax on the market for sweaters. Based on this information, which of the following is true? a. Consumers will pay $0 of the $5 tax. b. Consumers will pay $1 of the $5 tax. c. Consumers will pay $2 of the $5 tax. d. Consumers will pay $3 of the $5 tax. e. Consumers will pay $5 of the $5 tax. 25. A firm uses capital, K, and labor, L, to produce output, q, in a perfectly competitive market. The firm's production function is q = f(K, L) = 0.1L + 0.2K. The prices of labor and capital are w = 4 and r = 1, respectively. Compute the cost function for this firm. a. C(q) = 0.8q b. C(q) = 2q c. C(q) = 5q d. C(q) = 10q e. C(q) = 40q
Transcribed Image Text:22. Cameron's preferences can be represented by the utility function u(X,Y) = X02y04 If the market prices are px = 1 and py = 1, what is Cameron's optimal mix of goods X and Y? a. X= Y b. X = 2Y с. 2X %3D Y d. X= 4Y e. 4X = Y 23. Which of the following will is most likely to lead to a decrease in the market price of nuts? a. The cost of hiring nut pickers decreases. b. Nut butters and jelly are complements, and the price of jelly decreases. c. The New England Journal of Medicine reports that people who eat two ounces of nuts per day live five years longer than those that do not. d. A devastating flood occurs on nut farms in California, destroying many nut trees in the process. e. None of the events above will cause the market price of nuts to decrease. Price 70 p° = 53 P= 50 p = 48 10 D 70 80 24. The graph above depicts the effect of a $5 per unit (excise) tax on the market for sweaters. Based on this information, which of the following is true? a. Consumers will pay $0 of the $5 tax. b. Consumers will pay $1 of the $5 tax. c. Consumers will pay $2 of the $5 tax. d. Consumers will pay $3 of the $5 tax. e. Consumers will pay $5 of the $5 tax. 25. A firm uses capital, K, and labor, L, to produce output, q, in a perfectly competitive market. The firm's production function is q = f(K, L) = 0.1L + 0.2K. The prices of labor and capital are w = 4 and r = 1, respectively. Compute the cost function for this firm. a. C(q) = 0.8q b. C(q) = 2q c. C(q) = 5q d. C(q) = 10q e. C(q) = 40q
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