4. Jerry lives in a dormitory that offers soft drinks and chips for sale in vendingmachines. Her utility function is U = 60SC (where S is the number of soft drinksper week and C the number of bags of chips per week), so her marginal utility ofSis 60C and her marginal utility of C is 60S. Soft drinks are priced at 10birr each,chips 5birr per bag.A. Write the expression for Jerry's marginal rate of substitution between softdrink and chips.B. Use the expression generated in part (A) to determine Jerry's optimal mix ofsoft drink and chipsC. If Jerry has 100 birr per week to spend on chips and soft drink how many ofeach sheshe purchase per week?5. Given the long run production function is Q = 200LK3 calculateA. AP and AP.B. MPL and MPK C. MRTSLKD. elasticity of substitution6. Given the total cost function Q = Q - 4Q? + 14Q +60A. Specify average variable, marginal cost and average total cost functionB. Is average variable cost is reached at its minimum point at higher or lowerquantity than average total cost? Why?C. What is the maximum output level when average variable cost is at itsminimum point?D. Based on the given function show the trend of each cost function graphically(AVC, AFC, ATC and MC)?7. Given the following demand and cost functions under perfectly competitivemarketP = 180-Q and ATC = Q+20 + 200/QA. find profit maximizing level of price and outputB. the maximum level of profitC. Will the firm continue or stop production at this output level? Why?GROUP 2An individual consumes products X and Y and spends 500birr per time period.The prices of the two goods are 60birr per unit for X and 40birr per unit for Y. The

In economics, the Marginal Rate of Substitution is the rate at which a consumer can give up some…

4. Jerry lives in a dormitory that offers soft drinks and chips for sale in vending machines. Her utility function is U = 60SC (where S is the number of soft drinks per week and C the number of bags of chips per week), so her marginal utility of S is 60C and her marginal utility of C is 60S. Soft drinks are priced at 10birr each, chips 5birr per bag.

4. Jerry lives in a dormitory that offers soft drinks and chips for sale in vending machines. Her utility function is U = 60SC (where S is the number of soft drinks per week and C the number of bags of chips per week), so her marginal utility of S is 60C and her marginal utility of C is 60S. Soft drinks are priced at 10birr each, chips 5birr per bag.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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