Suppose Lou's demand for good X is given by XL =74 - P/6 and Dora's demand for good X is given by XD =129 -P/4 where x; denotes the quantity demanded by person i, i=L, D and P denotes the price of the good. Now suppose good X is not sold in stores. You have a total 34 units of good X and wish to divide it efficiently between Lou and Dora. How many units do you give to Lou? Enter this amount below. (Hint: You may want to derive and use the "aggregate demand" function.)

Suppose Lou's demand for good X is given by XL =74 - P/6 and Dora's demand for good X is given by XD =129 -P/4 where x; denotes the quantity demanded by person i, i=L, D and P denotes the price of the good. Now suppose good X is not sold in stores. You have a total 34 units of good X and wish to divide it efficiently between Lou and Dora. How many units do you give to Lou? Enter this amount below. (Hint: You may want to derive and use the "aggregate demand" function.)

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

Suppose farmers in a given market can either grow soy beans or corn on their land. In addition, suppose an increase in the demand for corn causes the price of corn to increase. All else equal, an increase in the price of corn creates an incentive for farmers to: Multiple Choice switch away from growing corn and into growing soy beans. switch away from growing soy beans and into growing corn grow less corn, but not change their production of soy beans. grow more corn, but not change their production of soy beans.
Please answer the question fully and completely else I will rate negative, thanks! Question 3 Consider an economy with two consumers, A and B, two goods called 1 and 2 and one firm. Consumers A and B are each endowed with a unit of each good. The utility functions of each consumer are: A: 13 4 4 u (x₁‚x2 ) = lnx₁ + Inx2 B:u ₁₂ (x, ‚ x 2 ) = x, x 2 The firm B 1 A 1 1 2 produces good 2 using good 1 as an input, according to the production function f(y) = y where y is the quantity of good 1. Consumer A is the sole shareholder of the firm and the firm operates to maximize profit. Page 2 If P₁ and P2 determine the utility maximizing demand of consumer are the per unit prices of goods 1 and 2, . B for each good as a function of p, and P2 · If P₁ P 2 1 and are the per unit prices of goods 1 and 2, determine the profit maximizing demand of the firm for good 1 as a function of p₁ and p2. Ifp, and p2 are the per unit 1 prices of goods 1 and 2, determine the utility maximizing demand of consumer…
1. a) Consider an economy with 3 agents, Mohammed (M), David (D) and Susan (S). There are two goods available, good x, and good y. The marginal rates of substitution (where good x is on the horizontal axis and good y is on the vertical axis) are given by for Mohammed, for David and for Mohammed and David are both consuming twice as much of the good x than good y, while Susan is consuming equal amounts of x and y. What are the conditions for Pareto efficiency in an exchange economy? Are these consumption levels economically efficient? Can these consumption allocations be observed in a perfectly competitive equilibrium in an exchange economy without production? Explain. b. There are two firms in the economy. Each firm employs positive amounts of capital and labour. The technology satisfies diminishing marginal rate of technical substitution of labour for capital. Currently, A’s marginal rate of technical substitution of labour for capital is 4 while B’s marginal rate of technical…
Consider the market for apartments. The market price of each apartment is $300,000, and each buyer demands no more than one apartment. Suppose that Lorenzo is the only consumer in the apartment market. His willingness to pay for an apartment is $480,000. Based on Lorenzo's willingness to pay, the following graph shows his demand curve for apartments. Shade the area representing Lorenzo's consumer surplus using the green rectangle (triangle symbols).
Please solve the second image. *First image is for information only.
Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than one electric vehicle. Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake's willingness to pay, the following graph shows his demand curve for electric vehicles. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols). PRICE (Thousands of dollars) 400 Jake's Demand 350 300 250 200 150 100 50 Market Price 0 0 3 4 5 QUANTITY (Electric vehicles) Jake's Consumer Surplus Now, suppose another buyer, Latasha, enters the market for electric vehicles, and her willingness to pay is $250,000. Based on Latasha's and Jake's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Jake's consumer surplus using the green rectangle (triangle symbols), and…
Tom has 500 dollars to spend on two goods, good 1 and good 2. The seller of good 1 offers Tom the following deal: For every three units (of good 1) you buy, you will get the fourth unit for free. Determine how many units of good 1 Tom will end up with if the price of good 1 is 3, the price of good 2 is 8, Tom spends all his income on the two goods and buys 9 units of good 2. Then enter the value below.
9
5. Consider a two-consumer one-firm economy with a single input good and a single output good. Consumers' utility functions are u4(x4) Suppose that the input good is divisible and that wA = wB = 1/2. Suppose that the output good is indivisible (i.e., that xg, q = 0, 1, 2, ...), and that the firm's production technology is such that it requires 1 unit of input to produce one unit of output. rA + 3r and uB(xB) 4x? + x. (a) Derive the Pareto set of this economy. (b) For all Pareto-efficient allocations from (a), derive a competitive equilibrium for this economy that generates these allocations.
Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a smartphone at a market price of $175. (Note: If a person will not sell a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) 400 350 Kevin Brian 300 250 Crystal Hilary 200 Market Price Edison 150 Edison 100 Crystal Hilary 50 Brian 1 2 5 6. 7 Kevin QUANTITY (Smartphones) will sell smartphones at the given market price, and total Based on the information on the preceding graph, you can tell that producer surplus in this market will be $ Suppose the market price of a smartphone increases to $275. PRICE (Dollars per smartphone)
Dean likes to practice guitar in his apartment, working primarily on mastering old Velvet Underground songs. Because he’s sure that developing guitar prowess will lead to riches – or at least critical acclaim in indie circles – he derives $500 in surplus from being able to practice. Dean’s practicing, however, is quite loud and can be heard clearly through paper-thin walls in his hip Brooklyn apartment. Britta lives next door and likes to read, but she is unable to do so when Dean plays guitar. She gets $350 in surplus from the satisfaction of reading. Suppose that when Dean and Britta bargain, they always split any surplus to be divided evenly. Assume that it’s common knowledge that courts always overestimate damages by $200, and transaction costs are $50. Given these assumptions, which of the following legal rules is most efficient: Assuming the same information from Question 28 above, what would be the most efficient tax to levy on Dean’s playing? A. $200 B.…