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.
There are two restaurants next to each other. Restaurant 1 (R1) sells burritos and Restaurant 2 (R2) sells burgers. Both restaurants have to simultaneously set their prices which can be any non-negative 1 real number. Denote by p1 the price of a burrito set by R1 and by p2 the price of a burger set by R2. Since consumers have a choice of which restaurant to go to and are price conscious, the price of each restaurant, besides impacting the demand for its own product, effects the demand for the product of the other restaurant as well. Specifically, the demand functions for the burritos sold by R1 and burgers sold by R2, denoted q1 and q2, respectively, are given by: q1 = 44 − 2p1 + p2 q2 = 44 − 2p2 + p1 (For simplicity, we are assuming here that demand is perfectly divisible). Finally, the cost of producing each unit of burger and burrito is the same and equal to 8. Model this strategic environment as a normal form game and find a pure strategy Nash equilibrium. Is the equilibrium you…
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 a two-agents, two goods economy, in which both agents, A and B, are represented by the following utility function: UA(1, 22) = rr2 UB(y1, Y2) = Y1y% There are w units of each good in the economy. 1. Characterize the set of Pareto optimal allocations and represent it in the Edgeworth box. The 3 units of each goods are initially share as follows: A has w units of good 1 and zero unit of good 2; B has zero unit of good 1 and w units of good 2. 2. Determine the Walrasian equilibrium 3. Represent the economy in the Edgeworth box.
Part 2 solution needed urgent
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).
In a town of two people, Ben and Tem (bear with me on this, okay) the city is trying to decide how many acres to devote to the public park. Ben's demand function is QA = 20 - p and Tem demand TD = 20 function is QD = 26 – 20p, where Q is measured in acres and p is measured in dollars. Acres are supplied according to the function p = 10 + 60Q. a. Calculate the Pareto efficient size of the park in acres. b. Assuming that both Ben and Tem are truthful, how much would each pay for the efficient size of the park? What would be the total amount paid by the group? c. Sketch a diagram that shows each person's demand for acres and the Pareto efficient outcome. d. Explain how the size of the park might be different if the size of the park were determined by voluntary contributions
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