Which of the following correctly represents the formula for relative PPP? Note: the formula has been manipulated algebraically OA. TEtust+ (Es/Et+1-Es/et)/ES/€1 OB. USt Et+ (Es/Et+1-Es/et/Es/et QC. USt Et+ (Es/et-Es/et-1)/Es/et-1- OD. Etust+ (Es/et-Es/et-1)/Es/et-11
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- In 2005, suppose a typical U.S. owner of a home theater (a television and a DVD player) bought 16 music CDs (9₁) per year and 18 top-20 movie DVDs (9₂) per year. The average price of a CD was about p₁ = $15, the average price of a DVD was roughly p2 = $20, and the typical consumer spent $600 on these entertainment goods. We'll call this typical consumer Barbara. We estimate her Cobb-Douglas utility function as 9₂ 10.49₂ 0.6 U(91, 92) = 91 Use the 3-point curved line drawing tool to draw Barbara's annual demand curve for CDs, using prices of $15, $30, and $60 as your control points. Carefully follow the instructions above, and only draw the required object. (...) p, price per CD 70- 65- 60- 55- 50- 45- 40+ 35- 30- 25- 20- 15- 10- 5- 0- 0 10 12 Quantity, CDs per year 8 14 16 18Rodrigo is taking a year between high school and college to work and save up. His utility from consumption each year is U(c) = discounts future utility by B. Rodrigo is going to make $I his year of working, and whatever he doesn't consume from that income will a savings account which will earn return r before he consumes next year. He has to pay for school expenses E in year two, before he consumes (but after return has been realized). 1-o and he go into(b) A consumer has $280 to spend on two commodities, the first of which costs $2 per unit and the second $5 per unit. Suppose that the utility derived by the consumer from x units of the first commodity and y units of the second is given by U(x,y) = 100x0.25y0.75 How many units of each commodity should the consumer buy to maximize utility? Compute the Lagrange multiplier a and interpret in economic terms.
- Joe likes eating candy and drinking soda, The price of a bar of candy is $2 while the price of a can.of soda is $3. joe has a budeet of 529. Suppose that candy and soda can only be purchased and consumed as whole units (in other words it is impossible for Joe to purchase 1/3 of a bar of candy or A/5 of a can of soda). Furthermore, assume that it is impossible for Joe to spend more than his budget (that is, his total expenditure on candy and soda cannot exceed his budget). The following table describes the marginal benefit (expressed in $) he obtains from each bar of candy and can of soda Marginal Benefit from Marginal Benefit from Soda (in $) Unit Candy (in $) 180 180 160 150 3 140 120 60 5. 100 45 60 30 7. 40 15 8 10 -30 9. 60 -90 10 -100 -120 Joe's optimal consumption bundle includes (enter a numerical answer here) bars of candy and (enter o (enter a numerical answer here) cans of soda, and the total benefit he derives from the consumption of the optimal bundle is $ numerical answer…Kenji is buying salad and pizza for a company lunch. Suppose that a bowl of salad costs $3.00, and a slice of pizza costs $4.00. Let E be the amount in dollars that Kenji spends on salad and pizza. If Kenji buys S bowls of salad and P slices of pizza, then the total amount of money he spends (E) can be represented by the equation Now rearrange the equation you wrote above so that P is written in terms of E and S. The quantity of pizza he buys can be represented by the equation Suppose Kenji has $48.00 to spend on salad and pizza; that is, E= $48.00. Complete the following table with the values of S or P that make the equation true. Hint: To complete the first row, determine the number of pizza slices Kenji can purchase with $48.00, when the number of salad bowls he purchases is 0. Pizza Budget Salad (Dollars) (Bowls) (Slices) 48.00 0 48.00 48.00 8 0January is choosing how much of pudding (measured on the horizontal axis) and how much of meat (measured on the vertical axis) to purchase with limited budget of $100. The price of pudding is $1.25 per pound and the price of meat is $3.75 per pound. Suppose the consumer wants to purchase the consumption bundle (20,40). This consumption bundle will be attainable O None of the other alternatives are correct O unattainable O efficient
- Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doing one of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing (y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours. Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activi- ties. He currently exhausts this entire budget by watching two movies and visiting the climbing gym fifteen times. With this monthly budget, he would also have been able to afford exactly seven movies and six visits to the climbing gym. Assume that both goods are perfectly divisible. (a) Write down Ronald's money and time constraints as algebraic inequalities. (b) Show, using algebra, that Ronald's two budget lines intersect at the bundle (x, y) (5.5, 8.7). = (c) Plot Ronald's money constraint using a red dotted line. Plot Ronald's time constraint using a blue dotted line. Clearly label each constraint, any axis…On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according tothe functionU(c, b) = 20c− c²+ 18b − 3b²a. How many cigars and glasses of brandy does he consume during an evening? (Cost isno object to J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum ofglasses of brandy and cigars consumed to 5. How many glasses of brandy and cigarswill he consume under these circumstances?Asap
- It takes Richard two hours round-trip to drive from where he lives in Fayetteville to Raleigh. He currently plans to take seperate trips to purchase a new car and a new motorcycle. In Fayetteville, a new car costs $25,000: in Raleigh the new car costs 12% less or $22,000. In Fayetteville, a new motorcycle costs $15,000: in Raleigh, a new motorcycle costs 16% less or $12,600. Is Richard more likely to purchase one of these goods in Raleigh?The expression, M = PXX+ PYY is called a budget constraint where M = amount of money available for expenditure; PX= price of commodity X; PY= price of commodity Y; PXX= expenditure on commodity X; PYY= expenditure on commodity Y. Use M = PXX+PYY to express Y as a function of X and note that the graph of this function is called a budget line. Algebraically derive: (1) the y-intercept; (2) the x-intercept. State what determines the slope of the budget line. Graph the function for M = 120; PX= 3; PY= 5 andshow what happens to the original budget line if M decreases by 25% with PX, PY constant.Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doingone of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing(y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours.Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activities. He currently exhausts this entire budget by watching two movies and visiting the climbinggym fifteen times. With this monthly budget, he would also have been able to afford exactlyseven movies and six visits to the climbing gym.Assume that both goods are perfectly divisible.(b) Show, using algebra, that Ronald’s two budget lines intersect at the bundle (x, y) =(5.5, 8.7).