Ñ7 3. Andy purchases only two goods, apples (a) and kumquats (k). He has an income of $40 and can buyapples at $2 per pound and kumquats at $4 per pound. His utility function isU(a,k) = 5a + 3k.%3Da. Draw Andy's budget line with apples on the x-axis and kumquats on the y-axis.b. What is his marginal utility for apples and his marginal utility for kumquats? What is his MRS?c. Draw some of Andy's indifference curves (you don't need to put bundles or utility numbers on theindifference curves, just be careful with the slope). What bundle of apples and kumquats will Andypurchase to maximize his utility? Show the optimal bundle on your diagram.d. Find Andy's demand function for apples for general I, Pa and Pk.

If there are no savings and the total money income(M) is used to buy 2 goods(X and Y), the budget…

Answered: 3. Andy purchases only two goods,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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After developing the new Personal computer with special functions the company would need to be cautious. Although there are patents out protecting the design of this new computer it is still possible for others to see the design and create something similar based off of it. Although licensing the brand would greatly benefit the cost of production and relieve most of the cost from transportation it would be wise to not give another company the opportunity to see the design. Creating the company in the home-country and exporting would help keep the design to ourselves and is therefore safe. However, doing this will increase the cost of transportation significantly. A third option that the company has is to wholly own a subsidiary. This will allow the company to control all matters regarding the production strategy as well as the marketing aspect. Setting up a wholly owned subsidiary is expensive and a major risk as it requires the parent company to commit 100% of the equity contributed.…
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