An old nursery rhyme tells us : Jack Sprat would eat no fat; his wife would eat no lean. This tellsus that utility is:objectivethe same for everyoneunchangingsubjective Barb can produce 10 apples or 10 oranges on her farm, while Jim can produce 20 apples or 40oranges. Is there a basis for trade?yes, they have different opportunity costs of productionThey should give up apples and oranges and grow kalenone of theseNo. Jim produces more apples and oranges

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Tony is throwing a party at his Fraternity and is trying to choose what booze to buy. A bottle of vodka has three times the alcohol as a six-pack of beer. Assume that Tony only cares about the total amount of alcohol in his basket. (use vodka on the X-axis and beer measured in six-pack on the Y-axis) a) Devise a utility function to represent these preferences. b) Suppose a bottle of vodka costs $40, a six-pack of beer costs $10, and the budget is $200. Write the budget constraint. c) Solve Tony’s utility maximization problem and find the optimal combination. d) Suppose that a bottle of vodka cost has increased to $50. What will be his new optimal combination.
The Law of Diminishing Marginal Utility is just a theory that has no application to everyday life. None of us behaves as if we were subject to this law. True or False? Explain.
What happens to utility when we move up and down on the indifference curve? What happens to utility when we move up across the indifference map?
You like candy and cake. After using your entire $30 budget at the sugar store, you find that the marginal utility from the last candy you consumed was 60 and the last piece of cake was 30. Assuming you have maximized your utility and the price of a piece of candy is $4, calculate the price of cake? Do not enter dollar signs. Answer:
What is the axiom of consumer choice that implies that consumers spend all their income in order to maximize utility?
Answer completely and typewritten to get upvote. If you already answered this, don't answer. I'll downvote you if i see the same answers. Thank you
Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should: reallocate spending from newspapers to magazines. none of the other answers are correct. reallocate spending from magazines to newspapers. be satisfied because he is already maximizing his total utility.

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An old nursery rhyme tells us : Jack Sprat would eat no fat; his wife would eat no lean. This tells us that utility is: objective the same for everyone unchanging subjective