8. Ann can finish a project either this week or next week. The delayed rewardsare 10 in either case. (The project can be done only once or not at all).Next week is busy and the cost of finishing the project are lower this week. Theimmediate costs are 4 this week and 6 next week.1 and B < 1. Imagine that AnnAnn has a quasi-hyperbolic utility with &|3Ddoes not finish the project this week. Then she should finish it next week(A) if ß > 0.6; (B) if ß > 0.4; (C) only if ß = 1; (D) for any ß.

The correct answer is option C .i.e. Only if β = 1.In the question we are given that, the delayed…

Answered: 8. Ann can finish a project either this…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A young consumer has to decide how to spend his spare time. He can either watch movies x or play online video games y. Each round of the game cost 20 and each movie cost 20. He has 200 dollars to spend each week. In addition, he has time constraint. He can spend no more than 20 hours for entertainment each week. A movie last 2 hours and playing a game takes about 1 hour. His utility is given by √xy. Use the Kuhn-Tucker condition to find his optimal choice. (Assume that x and y can take any value, not necessarily integers.) Does the solution satisfy the necessary and sufficient condition for a maximum?
Ding Ding is a cat philosopher. He spends his time on two activities. Sleep and thinking. Both activities produce pleasure to Ding Ding. How effective Ding Ding is in each activity varies day by day. But on a given day, if he spend “s” effective hours in sleeping and “t” effective hours in thinking, his utility is u(s,t)=s^2+t. you can assume that time is continuous in answering the following question. (A) Let us first ignore that there are only 24 hours each day. Label “s” on the x-axis and “t” on the y-axis in a diagram. Draw two indifference curves u(s,t)=s^2+t=24^2=576, and u(s,t)= s^2+t=12^2=144. On each indifference curve, you have to mark at least the coordinates of four points to illustrate the shape of it. (B) Describe in words how these two indifference curves in (a) relate to each other.
4. Steve's utility funetion over leisure and consumption is given by u(L,Y) = min (3L, Y). Wage rate is w and the price of the composite consumption good is p = 1. (a) Suppose w = 5. Find the optimal leisure - consumption combination. What is the amount of hours worked? (b) Suppose the overtime law is passed so that every worker needs to be paid 1.5 times their current wage for hours worked beyond the first 8 hours. Will this law induce Steve to work more hours? If so, how many? If not, explain.
[Nonlinear Budget Constraints] Suppose that Simone has preferences that are represented by the utility function U(x, y) = V(xy), and she has an income I = 20. (a) Suppose that px = 1 and py = 2. What is Simone's MRSX,y? What is her optimal bundle? %3D (b) Suppose now that Simone is subject to rationing. What is her optimal bundle when the maximum amount of x she can purchase is 15? When it's 10? When it's 5? (c) Suppose that the store where Simone does her shopping has a sale going on, where the x is half-off, up to 4 units. Algebraically, px = 0.5 for x 4. That is, the price per unit, up to four units of x is 1, but then increases to 2. The price of good y is py = 2. What is her new optimal bundle? (Note: it may be helpful to plot the budget set. What are the possibilities for what a solution would look like for this budget set?)
Only question D and E
7. Solve the following maximization problem: u(x1, X2 ) = In(x, ) + x, X1, X2 max 8. s.t. 2 x, + x,=10
Suppose you are on a three-day trip to Rome (from Monday to Wednesday) and during your stay you decide to consume only Waffle and Ravioli (measured on the horizontal and vertical axes respectively). You have a given amount of money (some constant) to spend on each of the three days. Suppose that the price of Waffle rises between Monday and Tuesday. If your optimum points of consumption on Monday and Tuesday are respectively called M and T, such that M to the left of T, what does it say about both the commodities? Illustrate your answer using an appropriate diagram.
Graph the isocost function and derive the linear equation associated with it. Budget=$100O, PK=$20 each and 10$ each after 20 units purchased, PL=$10 each
Typed and correct answer please. I ll rate
2. Suppose Jill derives utility from not only consuming goods, but also from enjoying leisure time. Let her utility function be defined as follows: U=C.25.R.75 where C is a consumption good that can be bought at a price of $1 and R is hours of leisure (relaxation) consumed per day. There are 24 hours in a day and leisure is defined as time spent not working. Jill has a job that pays $w per hour, a trust fund that pays her $M per day, and she can work any number of hours per day, L, she desires. C, consumption good; R, Leisure (relaxation); L, labor M, non-wage income; w, wage rate. a. Derive her labor supply function? b. Assume M = $100, at what wage is her quantity supplied of hours = 0?
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