We have 72 free units to distribute among 100 agents. Their willingness to pay is p: The function d(p) = 100 p gives us the number of agents willing to pay p or more. Find the CEEI solution.
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We have 72 free units to distribute among 100 agents. Their willingness to pay is p: The function d(p) = 100 p gives us the number of agents willing to pay p or more. Find the CEEI solution.
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- There are 40 people living in a village each having preference over apples andshirts represented by U(a,b) = a1/3s2/3, where a and s are amount of applesin pounds and shirts consumed, respectively. The price of a shirt is $10. Each villager has $300 income. Apples are supplied to the village by a farmer, whose supply function is S(pa) = 1000pa.Part a1What is the equilibrium price of apples? How many pounds of apples does eachvillager consume?Part a2What is the aggregate net consumer surplus at the equilibrium?Part a3What is the price elasticity of demand at the equilibrium?Part b1Suppose 50 more people move in to the village. What is the equilibrium pricenow? Part b2Are consumers better or worse off now? Why? If a consumer is worse off, byhow much additional income he/she needs to be compensated in order to be aswell off as in Part a.Suppose a town is planning to construct a new public park. Based on some market research, they have determined that the town’s 50 residents can be divided into two types with respect to their benefit from this public good. 20 of the town’s residents are of Type 1 and the other 30 residents are of Type 2. Each resident's individual demand for acres of park space is given by: Type 1: QD = 20 – P Type 2: QD = 40 – 2P a. Solve for the aggregate demand of the towns 50 residents as a function of the number of acres. Be sure to write down equations for each section of the aggregate demand curve, as well as the interval of quantities each section spans. b. Graph the aggregate demand curve calculated in part a. Make sure to label both intercepts, slopes, and the intersection of the two sections.The town of Wollulung has two residents: Bach (B) and Mozart (M). The town currently funds its free outdoor concert series solely from the individual contributions of these residents. Each of the two residents has a utility function over private goods (X) and total concerts (C), of the form: U = 3 × log(X) + 2× log(C) The total number of concerts given, C, is the sum of the number paid for by each of the two persons: С %3D Св + См Bach and Mozart both have income of 60, and the price of both the private good and a concert is 1. Thus, they are limited to providing between 0 and 60 concerts. a) How many concerts are given if the government does not intervene?
- 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…Suppose there are only two fishermen, Maria and Ruby, who fish along a certain coast. They would each benefit if lighthouses were built along the coast where they fish. The marginal cost of building each additional lighthouse is $100. Maria’s demand curve for lighthouses is given by P=170-2Q, and Ruby’s by P=150-Q, where Q is the number of lighthouses. Explain why we might not expect to find the efficient number of lighthouses along this coast. Draw the demand curve for Maria and Ruby individually and the market demand for lighthouses. What is the efficient number of lighthouses?All consumers have identical demand for a pint of pistachio ice cream. Each person has a demand function of P = 30 – 2Q, where P is the price and Q is the number of pints. Marginal cost is $2. Design a two-part tariff and calculate profits.
- Damian and Kira trade in antique cars. They typically buy either 1 or 2 cars at any given time, since they are difficult to find and expensive. The price per car P(Q) where Qis the total number of cars traded at a given time, is determined by the demand equation: K P(Q) 1 where K is a positive constant. If a € {1, 2} is Damian's choice and b = {1,2} is Kira's choice, (so Q = (a + b)) it costs Damian 2a to find and prepare a cars for market, and it costs Kira 3b to get b cars ready for market. Damian has better connections and access the cars before Kira, and so Damian chooses his value of a first. Kira then chooses his value of b, knowing Damian's choice. Their choices are determined by maximising their individual profits, ie the difference between how much they can sell their cars for, minus the total costs to prepare them for sale. (i) Express this game as an extensive form game tree, making sure to fully label all the nodes and links, and especially writing down their payoffs. (ii)…Ma1. Please give only typed answer.please if you can teach explain
- Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initial endowment of 3 units of good X and 5 units of good Y. Consumer B is given an initial endowment of 5 units of good X and 3 units of good Y. Consumer A's utility function is given by: UA(X,Y)= X + 4Y, and consumer B's utility function is given by UB(X,Y)= MIN (X, 2Y). If the prices are Px = 1 and Py = 3, if each consumer sells her initial endowment and buys back her optimal bundle, which of the following statements is true? Group of answer choices Both Markets are in Equilibrium There is Excess Demand in the Market for Good X = 2.4 There is Excess Demand in the Market for Good Y = 0.8 There is Excess Supply in the Market for Good Y = 1.6 There is Excess Supply in the Market for Good X = 1.6 EAnna and Bob are the only residents of a small town. The town currently funds its fire department solely from the individual contributions of these two residents. Each of the two residents has a utility function over private goods x and total number of firemen M, of the form: u(x, M) = 2 ln x + ln M. The total provision of firemen hired, M, is the sum of the number hired by each of the two persons: M MA+MB. Ann and Bob both have income of 200 each, and the price of both the private good and a fireman is 1. They are limited to providing between 0 and 200 firemen. For the purposes of this problem, you can treat the number of firemen as a continuous variable (it could be man-years). =Question 1 Tom is trying to figure out how to supplement his student bursary of £200 per week. He is considering a part-time job at a restaurant. The wage is £8 per hour. His utility function is U(C, L) = C L where C is his consumption measured in £ per week and L his leisure, measured in hours per week. The amount of leisure time that he has left after allowing for necessary academic activities is 50 hours a week. 1. Write out Tom's budget constraint and calculate the maximum value (i.e. he works the maximum time available) and minimum value? 2. Using your results from part 1, draw Tom's budget set (horizontal axis: leisure and vertical axis: consumption). 3. Let Y= student bursary, T = total amount of leisure time and w=wage. Set up the maximisation problem and calculate optimal consumption demand and leisure as a function of his student bursary and wage. 4. For the values given in the question, work out the value for optimal leisure hours and consumption spending L* and C*. 5.…