c) If the value of timber is the following increasing function of time:V = 2tExpressed in units of Rs. 1000. Assuming a discount rate of r and also assuming zeroupkeep cost during the period of timber growth, what is the optimal time to cut the timberfor sale? Calculate optimal time for r = 5%Question 03.a) Maximize the utility function U = X0Y025 subject to budget constraint680 = 8X + 5Y Also show that above utility function is homogenous and homothetic.5P+ P?andb) Find the demand function Q =f (P) if elasticity of demand is -Q = 500 when P = 10c) Write down the first order and second order conditions for maximum andfunction y = f(x1, X2, X3,.......... Xn).minimum of a

"You have posted multiple questions, I can only solve the only first question, rest you need to post…

Answered: a) Maximize the utility function U =…

a) Maximize the utility function U = X0°Y°25 subject to budget constraint 680 = 8X + 5Y Also show that above utility function is homogenous and homothetic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

c) If the value of timber is the following increasing function of time:
V = 2t
Expressed in units of Rs. 1000. Assuming a discount rate of r and also assuming zero
upkeep cost during the period of timber growth, what is the optimal time to cut the timber
for sale? Calculate optimal time for r = 5%
Question 03.
a) Maximize the utility function U = X0Y025 subject to budget constraint
680 = 8X + 5Y Also show that above utility function is homogenous and homothetic.
5P+ P?
and
b) Find the demand function Q =f (P) if elasticity of demand is -
Q = 500 when P = 10
c) Write down the first order and second order conditions for maximum and
function y = f(x1, X2, X3,.......... Xn).
minimum of a

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A student has a lunch utility function U(S, P) 8S + 3P, where S is number of salads per month and P is number of pizzas per month. The price of a salad is $5, the price of a pizza is 8, and his monthly income for lunch is $80. a) Derive the equation representing the consumer's demand for Salad. Represent the demand for Salad graphically. b) The price of Salad goes up to $25 and the price of Pizza does not change. Compute and represent graphically the new equilibrium of the student. What can you tell about the substitution effect on Salad and pizza
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