Questions d) to f) QUESTION 4Linguini and Colette consume only éclair (x,) and profiterole (x,). Linguini has utility functionUA = xfxf and Colette has utility function U® = 2xf x%. Linguini is endowed with 10 éclair (r,)and 3 profiterole (x,), while Colette is endowed with 20 éclair (x,) and 9 profiterole (x,).(a) Draw an Edgeworth boz with x, on the horizontal azis and x2 on the vertical azis. PositionLinguini on the bottom left corner and Colette on the top right corner. Indicate the total numberof units of x, and x2. Label the endowment allocation.(b) Derive the equation of the contract eurve, ie., find x (xt). In your graph in (a), draw thecontract curve.Suppose the price of éclair (x,) is $1 and the price of profiterole (x,) is $2.(c) Find each consumer's utilitymaximising basket.(d) How much of each good does each consumer wantbuy or sell? Are the markets in equilibriumat the given prices?(e) Verify that Walras' law holds at these prices.Now we will solve for the competitive equilibrium.() Use your solution to (b) to find the equilibrium price ratio, P1/P2-() Set x2 as the numeraire, i.e., assume pi = p and p2 = 1. Write each consumer's budget lineequation given the equilibrium price ratio.(h) Find the equilibrium allocation, ((xf,x±), (xf, xf)).

A utility Function is a mathematical illustration of an individual's preferences over unique…

Answered: utility function

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The first fill in the blank options are (Frances or dmitri) The second fill in the blank (Frances or dmitri) The third and fourth fill in the blanks you enter a number The fifth fill in the blank option is (higher or lower) the 6th fill in the blank is ( dmitri or Frances) and the final fill in the blank is (dmitri or Frances)
(c) Obviously, something is wrong. Can you explain what it is? (Hint: Think of basis, or reference. For example, if you had an investment that appreciated 100% in value one day, and you lost 100% of your investment the next, would you still have any money left?)
Company X is going to buy a total of 4 ads. They are going to advertise in the newspaper or on the radio. The more ads they buy the more customers they have based on the following schedule. Number of Ads Total new customers from newspaper ads Total new customers from radio ads 0 0 0 1 100 200 2 180 320 3 220 390 4 240 400 In this case, the best strategy is to buy newspaper ads and radio ads. Enter whole numbers.
An investor is considering the following two investments.•Investment 1 has an expected rate of return (profit) of 8% and costs $40 per share.•Investment 2 has an expected rate of return (profit) of 5% and costs $30 per share.The investor has $100 to invest to maximize her total expected rate of return, and shemust buy whole shares (not partial/factional shares) of the investments.(a) Formulate the investor’s integer programming problem.(b) Solve the investor’s problem using branch and bound and explain youranswer. How much of each investment does the investor purchase?
(J) Everyone living in Isolation, Alaska works at one of two fish canneries for their entire life. Over a career at Placid Cannery a worker is paid $1 million and the risk of death by canning machine is 1%. At Megadeath Cannery a worker is paid $1.2 million and the risk of death is 5%. What is the value of a statistical life in Isolation? Show your work.
Answer this question
Shane teaches guitar lessons. The graph below shows the comparison of his expenses and revenue for one month. r ($) L -1000 000 -600 200 Number of Lessons Expenses Revenue How many lessons must he teach to break even?
An action is not fraud unless (a) it involves a loss of value that exceeds $100 (b) it is done to obtain property to which the perpetrators is not entitled (c) the perpetrator is apprehended (d) it involves interstate business (e) none of the above
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