Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of $ 2 in gasoline money. He has a total of $ 1 0 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6 , figure out the points 011 Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

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Answer 1

Textbook Question

Chapter 6, Problem 1SCQ

Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of $ 2 in gasoline money. He has a total of $ 1 0 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

Chapter 6, Problem 1SCQ, Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

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Exercise 6 Imagine that you head production of a multinational food processing company. The ongoing uncer- tainty about costs means that you are unsure of the future cost of one of your inputs, x2. Your firm's production function is y = f(x1, x2) = x²x²² The output price p is 1000, x1 = 27, and wx₁ = 60. 1. Suppose the current input price is Wx2 = 50. Solve for the optimal choice of x2. 2. Now suppose that the probability the input price remains 50 is 0.65 and the probability that Wx2 60 is 0.35. Solve for the optimal choice of x2. Round down to the nearest integer. = 3. Finally, suppose the costs do actually rise, i.e., Wx2 = 60. Calculate the difference in profit from the uncertainty in (2) vs. the certainty in (1).

Answer 2

Textbook Question

Chapter 6, Problem 1SCQ

Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of $ 2 in gasoline money. He has a total of $ 1 0 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

Chapter 6, Problem 1SCQ, Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 6, Problem 1SCQ

Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of $ 2 in gasoline money. He has a total of $ 1 0 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

Chapter 6, Problem 1SCQ, Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 6, Problem 1SCQ

Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of $ 2 in gasoline money. He has a total of $ 1 0 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.

Chapter 6, Problem 1SCQ, Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

Answer 8

Expert Solution & Answer

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.

Economics Concept Introduction

Concept introduction:

Budget Constraint: It represent all the possible combination of goods and services that a consumer can purchase with the given prices and income.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Using the values in given table, find out the points on Jeremy’s consumption choice budget constraint and identify his utility maximizing point?

Answer 12

Answer to Problem 1SCQ

The maximum total utility is 1120 on round 1 with 80 utility and 160 minutes of phone minutes within the given $10.

Answer 13

Explanation of Solution

It is given that Jeremy has total $10 to spend ,a round trips costs him $2 and phone calls costs $0.05 per minute. With the given money, he can either go for 5 round trips or no phone calls. second option is no round trips and 200 minutes of phone calls. there can be the combination of two in between. hence the budget constraint formulae is

Total amount=Price of round trips*Quantity of round trips+ Price of phone calls*Quantity of phone calls

A =P(r)*Q(r)+P(pc)*Q(pc)

$10=$2*Q(r)+$0.05*Q(pc)

dividing the whole equation by $0.05

$10/0.05=($2*Q(r)+$0.05*Q(pc))/0.05

200= 40*Q(r)+Q(pc)

Q(pc)=200-40*Q(r)

Hence with the given budget constraint and table, below table is constructed which shows zero to five round trips and how many phone minutes can be afforded with the given budget with total utility of each.