Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 7, Problem 7E
To determine

If the earning is $15 per hour with the inflation rate for the current year is 10% and the firm provide cost-of-living raise grounded on the inflation rate, then the amount that will be received after the raise. Had the cost-of-living raise was granted on the basis of last year's inflation, whether the nominal income would have been keeping up with the cost of living.

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Problema 4 (20 puntos): Supongamos que tenemos un ingreso de $120 y enfrentamos los precios P₁ =6 y P₂ =4. Nuestra función de utilidad es: U(x1, x2) = x0.4x0.6 a) Planteen el problema de optimización y obtengan las condiciones de primer orden. b) Encuentren el consumo óptimo de x1 y x2. c) ¿Cómo cambiará nuestra elección óptima si el ingreso aumenta a $180?
Please draw the graph for number 4 and 5, I appreciate it!!
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