Question 3:If the decision maker has the following utility function,u(w) =-au, where a >0Derive the Jensen's inequality based on the utility given?

A concept known as Jensen's Inequality establishes a relationship between the function of the…

Answered: svode mu Question 3: Tisgorg If the…

svode mu Question 3: Tisgorg If the decision maker has the following utility function, u(w)--aw, where a >0 Derive the Jensen's inequality based on the utility given?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A, b and c
The consumer choice is not restricted to the choice of consumptiongoods. In fact, it can apply to all our decisions that involve trade-offs. Suppose Mary has awage per hour of 10 euros. With her earned income she consumes. That isC=wH per day.She also decides how many hours to work of take leisure time each day.H=24-N, whereHis work and N is leisure. Her utility is given by （picture） Solve for the optimal decision of labor/leisure. Plot the budget constraint and the indif-ferent curve. What is the labor supply function?
Frank's utility function for WWE wrestling event tickets (x,) and NASCAR race tickets (2) is of the following Cobb - Douglas form: U(x,, ) = x 1 2 0.25 0.75 x 2 his income is Y, the price of WWE tickets is p₁, and the price of NASCAR tickets is p₂. a. Mathematically derive his 1 demand functions for x, and x2. No graphs! You are not required to use Lagrangian Function, you can just use the demand formulas for the Cobb - Douglas utility function (Chapter 5, fourth slide). b. Using your answers from part (a), find the demand functions for x and x2, and mathematically prove that they have the proper negative slope.
Can you please help awnser 8 d I have attached awnser to 8 a to make it easier to understand and complete. Thank you
4. Consider a society that has three individuals - 1,2 and 3 - and three alternatives - x, y and z. The society has a preference aggregation rule F. In year 2007, the profile of individual preferences were as follows: 1 2 3 X y Z y Z V It is known that the rule F satisfies Completeness, Transitivity, Anonymity, Unanimity and Independence of Irrelevant Alternatives. Also, in year 2007, F ranked x strictly above y. Now, we are in year 2008. The individual preferences have changed to: 1 2 3 Z y y X Z Z y X x (a) How does the society rank between y and x in 2008? Why? (b) How does the society rank between x and z in 2008? Why? (c) How does the society rank between y and z in 2008? Why? (d) What were the social preferences over all three alternatives in 2007?
Explain why the lifetime budget constraint must be satisfied as a strict equality
Suppose the consumer's utility function is given by U(x,y) = X3/5y2/5, and the exogenous variables are given by M = 500, Px = 5, and Py = 4. Price of y changes to Py = 2. What is the income effect ony?O A.-14.53O B. +14.53O C. +24.21O D. +25.79O E. None of the above Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
You found your utility preference given by U (w, d) = w√d where w is your wage, and d is the amountof noise (ie - decibels) you must listen to at your job. Let’s assume you have the option to workat home in silence (where d = 36), in a cubicle office (where d = 64), or in an open-air sharedworkspace (where d = 100). Further assume the economy is in equilibrium, and you do not haveincentive to change jobs.(a) Assuming working at home gives you a wage of $100, what would your wage be working in thecubicle office? In the shared workspace?(b) What is the compensating wage differential between these jobs?(c) Explain why the wage is different in each situation, and give an example of another indus-try/situation with a compensating wage differential.