Question

In: Economics

Jim spends $100 on leisure when he is not exercising. He doesn’t participate in any leisure...

Jim spends $100 on leisure when he is not exercising. He doesn’t participate in any leisure when he does 25 hours of exercise. He proudly claims that he maximizes his satisfaction by choosing to perform 10 hours of exercise and $60 on leisure.

a) Draw the budget line and illustrate where her indifference curve intersects the budget line. Call this indifference curve Ua.

b) Under a new pricing arrangement, her budget line changes. His income remains the same but the slope is different: she now spends $70 on leisure when he is not exercising and does 70 hours of exercise when she doesn’t participate in any leisure. Although he could still choose to perform 10 hours of exercise and $60 on leisure, he claims that he is better off with 25 hours of exercise and $45 worth of leisure. Draw the updated budget line and illustrate where her indifference curve now intersects the updated budget line. Call this indifference curve Ub.

c) Is Jim's claim that he is better off correct? Use your understanding of revealed preferences and indifference curves to support his claim.

Solutions

Expert Solution

Rahul Sunny answered 3 months ago
Next > < Previous

Related Solutions

Respirator Removal Source: Jim was an active person. He was a lawyer by profession. When he...
Respirator Removal Source: Jim was an active person. He was a lawyer by profession. When he was forty- four years old, a routine physical revealed that he had a tumor on his right lung. After surgery to remove that lung, he returned to a normal life. However, four years later, a cancerous tumor was found in his other lung. He knew he had only months to live. Then came the last hospitalization. He was on a respirator. It was extremely...
Leadership Subject You are unhappy with your teammate, Jonah. He did not participate in any discussion...
Leadership Subject You are unhappy with your teammate, Jonah. He did not participate in any discussion or contribute to the completion of the assignments. He gives excuses when you attempt to assign tasks to him. Describe how would you initiate and respond to conflict resolution with Jonah. Word limit: 200 words
When Jim began working in the human resources department at KR Electronics, he was impressed with...
When Jim began working in the human resources department at KR Electronics, he was impressed with the number of advancement opportunities the job offered. His first task was to monitor reports that came in from employees through the company’s ethics hotline. It was a simple job, but one Jim felt would lead him to a higher position in the HR department. He spent two days learning about the company’s ethical policies and values, such as the importance of integrity and...
James has a $100 monthly exercise budget, which he spends at Tarheel Gym on yoga classes...
James has a $100 monthly exercise budget, which he spends at Tarheel Gym on yoga classes (Y) and spin classes (S). The price of yoga class is $10, and the price of a spin class is $5. Draw his budget constraint for each of the following scenarios. Use a separate graph for each part and label all axes, intercepts and the coordinates of any kink points. Treat each case separately and graph yoga classes on the x-axis and spin classes...
Jim, a young baseball player has a 40% chance of getting a hit when he comes...
Jim, a young baseball player has a 40% chance of getting a hit when he comes up to bat during a game. If he comes to bat 5 times during the next game then: This is binomial probability question i) What is the probability that he gets a hit exactly 2 times in the game. ii) What is the probability that he gets at most 4 hits in the game. iii) What is the probability that he does not get...
Phineas receives $100 per week from his parents. He spends his entire income on two goods:...
Phineas receives $100 per week from his parents. He spends his entire income on two goods: Sprite (which cost $2 each) and chicken burgers (which cost $4 each). a) (8 points) Draw Phineas's budget constraint. Suppose that Phineas decides to purchase 20 Sprites and 20 chicken burgers this week. Is this choice within Phineas's opportunity set? Explain and show this choice on your graph. (Do not forget to label the axes of your graph) b) (2 pts) What is the...
Phineas receives $100 per week from his parents. He spends his entire income on two goods:...
Phineas receives $100 per week from his parents. He spends his entire income on two goods: Sprite (which cost $2 each) and chicken burgers (which cost $4 each). a) (8 points) Draw Phineas's budget constraint. Suppose that Phineas decides to purchase 20 Sprites and 20 chicken burgers this week. Is this choice within Phineas's opportunity set? Explain and show this choice on your graph. (Do not forget to label the axes of your graph) b) (2 pts) What is the...
When Bob moved to a new city after he changed jobs in 2017, he drove 100...
When Bob moved to a new city after he changed jobs in 2017, he drove 100 miles and paid a professional mover $1,500. His new employer reimbursed him $600 for these expenses. Assuming his move related closely to the start of his new job and he met the time and distance tests, what amount may he claim as an above-the-line adjustment for moving expenses? Carolina passed away in 2017. Her granddaughter, Olivia, is the court-appointed personal representative for Carolina's estate....
On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he...
On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product? Group of answer choices The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. The farmer is able to produce 5,400 bushels of wheat when he hires 4...
Pick any fortune 100 company and determine when they implemented the new standard and the impact...
Pick any fortune 100 company and determine when they implemented the new standard and the impact on their financial statements.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT