6. A consumer with utility U(Co,C₁) = Co¹¹C₁ earns lo = 45,000 now and expects to earns 1₁ = 35,000 next year. They face interest rates r = 0.08 for borrowing and get paid rs = 0.04 for saving. Will they borrow or save in t = 0? How much? Do this problem two ways: a. Marginal-graphical, i.e. sketch their scenario and use marginal tradeoffs to explain how they get to their optimal bundle; and b. By setting up a Lagrangian to show which constraint(s) are binding and what bundle satisfies the Lagrangian's first-order conditions. [Note that you should get the same bundle using both approaches...]

6. A consumer with utility U(Co,C₁) = Co¹¹C₁ earns lo = 45,000 now and expects to earns 1₁ = 35,000 next year. They face interest rates r = 0.08 for borrowing and get paid rs = 0.04 for saving. Will they borrow or save in t = 0? How much? Do this problem two ways: a. Marginal-graphical, i.e. sketch their scenario and use marginal tradeoffs to explain how they get to their optimal bundle; and b. By setting up a Lagrangian to show which constraint(s) are binding and what bundle satisfies the Lagrangian's first-order conditions. [Note that you should get the same bundle using both approaches...]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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KATHY BUYS A TELEVISION SET FROM A MERCHANT WHO ASKS P1,500.00 AT THE END OF 60 DAYS (CASH IN 60 DAYS). KATHY WISHES TO PAY IMMEDIATELY AND THE MERCHANT OFFERS TO COMPUTE THE CASH PRICE ON THE ASSUMPTION THAT MONEY IS WORTH 8% SIMPLE INTEREST. WHAT IS THE CASH PRICE TODAY? O a. P1,480.26 O b. P1,408.26 O c. P1,048.26 O d. P1,840.26
Refer to the information provided in Table 7.5 below to answer the question(s) that follow. Table 7.5 Price per Unit in Units Purchased 2014 2016 2013 $2.00 2015 $2.00 $2.10 O2.40 $2.50 $3.00 $3.50 $4.00 Blueberries $2.00 Pineapples Cheese $2.50 $2.50 $3.00 Refer to Table 7.5. Suppose 2015 is the base year. The price index in 2014 is Select one: a. 97.4. b. 106.1. c. 94.2. d. 123.0. O53
Choose the statement that is incorrect. (DD OA. Diminishing marginal utility of wealth means that the gain in utility from an increase in wealth is smaller than the loss in utility from an equal decrease in wealth. OB. Diminishing marginal utility of wealth means that the pain from a loss is greater than the pleasure from a gain of equal size. OC. Expected wealth is the utility value of what a person expects to own at a given point in time. OD. We can measure the degree of risk aversion by the compensation needed to make a given amount of risk acceptable.
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>A Moving to another question will save this response. Question 17 Which of the following relations is not correct? O A. MPS = MPC + 1. %3D O B. 1- MPC = MPS. O C. MPC + MPS = 1. O D. APS + APC = 1.
Give me accurate answer and full explanation otherwise i give multiple downvote and complain to bartelby Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
6. Critical analysis Q13 Gouge-em Cable Company is the only cable television service company licensed to operate in Backwater County. Most of its costs are access fees and maintenance expenses. These fixed costs total $640,000 monthly. The marginal cost of adding another subscriber to its system is constant at $2 per month. Gouge-em's demand curve can be determined from the data in the accompanying table. Complete the following table by computing the total revenue, total cost, and profit at each of the various subscription prices. Number of Subscribers Subscription Price (Thousands Per Month) Total Revenue ($, Thousands) Fixed Cost ($, Thousands) Total Cost ($, Thousands) $640 $640 $640 $640 $640 $640 $25 20 15 10 5 1 20 40 60 80 100 150 $ $ $ $ $ $ |$ $ $ $ Profit ($, Thousands) $ $ $ S $
2. General Equilibrium. consumers, each with the same Cobb-Douglas preferences except with differ- ent parameters. Consumer 1 has utility function u(x, x)= (x})"(x})!-«, while Consumer 2 has utility function u(x, x;) = (xP(x)-P. The endowment of good j owned by consumer i is denoted w. The price of good 1 is p, and the price of good 2 is 1. In the superscript, we denoted the consumer i = 1,2; in the subscript, we denote the good j= 1,2. Consider an exchange economy with two Write the maximisation problem faced by each consumer i = (a) 1,2, taking care to define the objective function and the budget constraint. Set up the Lagrangian and find the first order conditions. (b) For each consumer i = 1,2 , use the first-order conditions to determine the demand functions for each consumer i = 1,2 and for each good j = 1,2, in terms of the price p. (c) Find the aggregate demand for each good j = 1,2 and clear the markets for each good. Hence, show that the equilibrium price pi is given by the…