Suppose the preferences of an individual are represented by a quasilinear utility function: U(x, y) = ln(x) + 3y a) Initially, p=1, Py=6 and I=102. Then, the price of x increases to 2 (p=2). Calculate the changes in the demand for r. Please also calculate the substitution and income effects of the change in p, on r. (Hint: since the change in price is not small, you cannot use the Slutsky equation. You need to have numbers instead of functions as the answer.) b) Please also calculate the substitution and income effects of the change in p on y. c) Instead of doubling to 2, suppose pz is only increased by a small amount. Use the Slutsk equation to find the substitution and income effects of the change in the price of r on I Compare your result to (a). Explain why there's no income effect of the change in p, on a Show your result on an indifference curve. d) Use the Slutsky equation to find the substitution and income effect of the change Pa on y. Compare your result to (b).
Optimization
Optimization comes from the same root as "optimal". "Optimal" means the highest. When you do the optimization process, that is when you are "making it best" to maximize everything and to achieve optimal results, a set of parameters is the base for the selection of the best element for a given system.
Integration
Integration means to sum the things. In mathematics, it is the branch of Calculus which is used to find the area under the curve. The operation subtraction is the inverse of addition, division is the inverse of multiplication. In the same way, integration and differentiation are inverse operators. Differential equations give a relation between a function and its derivative.
Application of Integration
In mathematics, the process of integration is used to compute complex area related problems. With the application of integration, solving area related problems, whether they are a curve, or a curve between lines, can be done easily.
Volume
In mathematics, we describe the term volume as a quantity that can express the total space that an object occupies at any point in time. Usually, volumes can only be calculated for 3-dimensional objects. By 3-dimensional or 3D objects, we mean objects that have length, breadth, and height (or depth).
Area
Area refers to the amount of space a figure encloses and the number of square units that cover a shape. It is two-dimensional and is measured in square units.
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