2. Suppose a consumer has an income of $100. P1=10 and p2=10. a. Draw the consumer's...

2. Suppose a consumer has an income of $100. P1=10 and p2=10. a. Draw the consumer's budget constraint b. On the same drawing, add an indifference curve on which the optimal basket lies. Assume the indifference curve is convex as usual c. On the same drawing, add an indifference curve which has a lower utility level than the optimal basket. Make sure to include the intersections of the curve with the budget constraint, and carefully explain why they cannot be optimal although they are on the budget line.

3. Suppose the two goods, X1 and X2, are perfect substitutes at the ratio of 1 to 2 - each unit of X1 is worth, to the consumer, 2 units of X2. The consumer had an income of $100. P1=5, and P2=3. Find the optimal basket of this consumer.

4. Suppose we have two consumers in the market. Joe has the following demand curve: P=10-Q1. Lucy has the following demand curve: P=10-3Q2. Find (algebraically) the formula for the market (or aggregate) demand curve. Draw all 3 curves on 3 separate graphs that should be drawn next to each other (so I can see the horizontal summation of quantities).

5. Suppose the two goods, are perfect complements at the ratio of 1 to 1. P1=10 and P2=40. I=1000. Find the optimal basket for this consumer, and graph it (including the budget line and the relevant indifference curve)

Expert Solution

Rahul Sunny answered 2 years ago

1. Suppose a consumer has an income of $100. P1=10 and p2=10. a. Draw the consumer’s...

1. Suppose a consumer has an income of $100. P1=10 and p2=10. a. Draw the consumer’s budget constraint b. On the same drawing, add an indifference curve on which the optimal basket lies. Assume the indifference curve is convex as usual c. On the same drawing, add an indifference curve which has a lower utility level than the optimal basket. Make sure to include the intersections of the curve with the budget constraint, and carefully explain why they cannot be...

Vectors p1 = [10 2] and p2 = [2 15] are represented in o1x1y1 coordinate frame....

Vectors p1 = [10 2] and p2 = [2 15] are represented in o1x1y1 coordinate frame. Translate o1x1y1 by t = [30 1]T and rotate by 45◦ to obtain o2x2y2. Is the dot product of p1 and p2 same in o1x1y1 and o2x2y2? I believe o1x1y1 and o2x2y2 are the pair of vectors before and after the translation and rotation

Assume you have two processes, P1 and P2. P1 has a high priority, P2 has a...

Assume you have two processes, P1 and P2. P1 has a high priority, P2 has a low priority. P1 and P2 have one shared semaphore (i.e., they both carry out waits and posts on the same semaphore). The processes can be interleaved in any arbitrary order (e.g. P2 could be started before P1). i. Explain the problem with priority inversion Briefly explain whether the processes could deadlock when: ii. both processes run on a Linux system as...

Suppose in a 2-period model that the consumer has a wage income when young of w1=10...

Suppose in a 2-period model that the consumer has a wage income when young of w1=10 and when old w2=10. The consumer has a Cobb-Douglas utility function as U(c1,c2)=c1αc21-α. The asset carried from young to the old is a2 and the interest rate is r. (1) Calculate (c1, c2, a2) (10 points) When α=0.1, r=0 When α=0.9, r=0 (2) How would you interpret the result in (1)? What is the intuition behind the different results given different parameter values? (5...

k1 = k2 m1=9m^2 P1=P2 What is the relationship between P1 and P2? The momentum will...

k1 = k2 m1=9m^2 P1=P2 What is the relationship between P1 and P2? The momentum will be the same? K represents kinetic energy

Draw a demand curve that shows an decrease in price (from P1 to P2) and the...

Draw a demand curve that shows an decrease in price (from P1 to P2) and the corresponding change in quantity demand (from Q1 to Q2) leaving the revenue unchanged. Use the graph to show the initial and the final revenue. Make sure that the area indicating the revenue is, in fact, constant. Add a (simple) scale to your axes and calculate the initial revenue, the loss and gain in revenue due to the price increase, and the final revenue.

Suppose an individual’s utility function is u = x11/2x21/2. Let p1=4, p2=5, and income equal $200....

Suppose an individual’s utility function is u = x11/2x21/2. Let p1=4, p2=5, and income equal $200. a. With a general equation and general prices, derive the equal marginal principle. Graphically illustrate equilibrium and disequilibrium conditions and how consumers can reallocate their consumption to maximize utility. b. What is the optimal amount of x1 consumed? c. What is the optimal amount of x2 consumed? d. What is the marginal rate of substitution at the optimal amounts of x1 and x2? e....

2. [17: 20, 10, 2, 1] Find the Banzhaf power distribution for this system. P1: P2:

2. [17: 20, 10, 2, 1] Find the Banzhaf power distribution for this system. P1: P2: P3: P4:

Suppose that the current market price for DVRs is $200 (P1) and average consumer income (Y1)...

Suppose that the current market price for DVRs is $200 (P1) and average consumer income (Y1) is $50,000. Under these conditions, 7.5 million DVRs will be sold this year (Q1). Econometricians have estimated that the elasticity of demand for DVRs is -2.65 and the income elasticity for DVRs is 3.5. Use this information to predict the annual number of DVRs (Q2) sold under the following conditions: Increasing competition from Korea causes DVR prices to fall to $185 with income remaining...

Use Cohen Sutherland algorithm to clip line P1(70,20) and p2(100, 10) against a window lower left...

Use Cohen Sutherland algorithm to clip line P1(70,20) and p2(100, 10) against a window lower left corner(50,10) and upper right hand corner(80,40)

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