) = N 's“, where 0 < a <1 and N > 0. The price of jam is pj, the price of sandwiches is Ps, and Joey monthly budget Y to spend on lunch. Explain why you can safely use a simpler Cobb-Douglas utility function, V(j, s), to represent Joey's preferences, which is the same as U(j, s) except for replacing N with 1. Transform V (j, s) by taking natural logs and bringing down exponents. Explain why it is useful to do this for a Cobb-Douglas utility function, but not for a quasi-linear utility function. Use In(V(j, s)) and the substitution method to derive the formulas for Joey's optimal amount of jam, j*, and sandwiches, s*, to buy and consume per month. Simplify your answers so that you arrive at the (1-a)Y formulas j* aY and s* = Ps Pj

) = N 's“, where 0 < a <1 and N > 0. The price of jam is pj, the price of sandwiches is Ps, and Joey monthly budget Y to spend on lunch. Explain why you can safely use a simpler Cobb-Douglas utility function, V(j, s), to represent Joey's preferences, which is the same as U(j, s) except for replacing N with 1. Transform V (j, s) by taking natural logs and bringing down exponents. Explain why it is useful to do this for a Cobb-Douglas utility function, but not for a quasi-linear utility function. Use In(V(j, s)) and the substitution method to derive the formulas for Joey's optimal amount of jam, j, and sandwiches, s, to buy and consume per month. Simplify your answers so that you arrive at the (1-a)Y formulas j* aY and s* = Ps Pj

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please no written by hand and no emage
Exercise: 01 Issue a promissory note: ⑴Amount ￡3,026.00 ⑵Date and place of issue 8/August/2009，Guangzhou, China ⑶Tenor At 90 days after date ⑷Maker Guangdong Imp. & Exp. Co., Guangzhou ⑸Payee Chemicals Import & Export Company London ⑴Drawer Thames Enterprises Ltd., London ⑵Drawee The National Westminster Bank Ltd., London ⑶Payee Philips Hong Kong ⑷Date and place of issue 07/01/2001，London ⑸Amount GBP79,014 Exercise: 02 Issue a check:
Inflation rate for the developed country (New Zealand).
Inflation rate between each year what kind of measurement is this?
Liz immigrated to Canada at age 33. By age 65, she will have lived in Canada for 32 years. Calculate her OAS