Marvin has a Cobb-Douglas utility function, U=q20.5920.5 his income is Y = $500, and initially he...
Marvin has a Cobb-Douglas utility function, U=9,0.5920.5, his income is Y = $900, and initially he faces prices of p1 = $1 and P2 = $2. If p, increases from $1 to $2, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's compensating variation (CV) is $ 1. (Enter your response rounded to two decimal places and include a minus sign if necessary.) Marvin's change in consumer surplus (ACS) is $ . (Enter...
Roger's utility function is Cobb-Douglas, U = 80.67 20.33, his income is Y, the price of B is PB, and the price of Z is pz. Derive his demand curves. Roger's demand functions are B= and Z= . (Enter any numbers rounded to two decimal places. Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the_ character.)
8.3 Unanswered Consider u(x1, x2) = x95x95, I = 300,P1 = 25,p2 = 1. If Pidecreases from $25 to $9, what is the equivalent variation? Enter a number only, round to two decimals. If money needs to be taken away from the consumer include a negative sign. Type your response 8.4 Unanswered Consider u(x1, x2) = x9.5x2:5,1 = 300,P1 = 4,p2 = 1. If Piincreases from $4 to $9, what is the compensating variation? Enter a number only, round to...
George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He has the following data representing a month from last year and an equivalent month this year: Last Year Now Units Produced 1,000 1,000 Labor (hours) 300 250 Resin (pounds) 60 46 Capital Invested ($) 10,000 12,500 Energy (BTU) 2,950 2,750 a) What is the labor productivity (bowling balls...
Derive Roger's Engel curve for B. Recall that Roger's utility function is Cobb-Douglas, U=B0.20 20.80 his income is Y, the price of B is PB, and the price of Z is pz. Roger's Engel curve for B is Y= . (Round any numerical coefficient to one decimal place and properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the character.)
2. Abagail has an estimated Cobb-Douglas utility function of U = 982592.75 for food, 91, and housing, 92. The price for food is arbitrarily set at $1 per unit Pi = $1 and the average monthly rent near UCF, P2, is $1.50 per sq ft. Jackie, like the average UCF student spends $800 on food and housing per month. (a) (20 points) Using calculus, solve for Abagail's optimal quantities of housing and food. For 10 bonus points provide the marginal...
1. When a consumer has a Cobb-Douglas utility function given by u(x, y) = xa yb , their demand for good x is given by x∗ = m/Px (a/a+b) where m is income and Px is the price of good x. Using this demand function, find the formula for this consumer’s price elasticity of demand. Interpret it in words.
Assume a Cobb-Douglas production function of the form: 10L023 K043 What type of returns to scale does this production function exhibit? In this instance, r This production function exhibits returns to scale equal(Enter a numearic response using a real number rounded to two decimal places) a numenic O A. increasing returns to scale. O B. constant returns to scale. ⓔ C. initially decreasing but then constant returns to scale O D. decreasing retums to scale O E. iniially constant but...
1. Homer is a deeply committed lover of chocolate. Assume his preferences are Cobb-Douglas over chocolate bars (denoted by C on the x-axis) and a numeraire good (note: we use the notion of a numeraire good to represent spending on all other consumption goods – in this example, that means everything other than chocolate bars – its price is always $1). a. Homer earns a salary that provides him a monthly income of $360. Last month, when the price of...
8.5 Unanswered 5 Consider u(x1, x2) = x9.5x9.,1 = 300,P1 = 4,p2 = 1. If Piincreases from $4 to $9, what is the equivalent variation? Enter a number only, round to two decimals. If money needs to be taken away from the consumer include a negative sign. Type your response 8.6 Unanswered Consideru(x1, x2) = 2x0.5 + x2,1 = 200,21 = 1,p2 = 4. If P2 increases from $4 to $8, what is the compensating variation? Enter a number only,...