Assume the following information: B = PxQX + PyQy
Assume the following information:
B = PxQX + PyQy
Budget = 100
Px = 5
Py = 4
Solve for Qx and find the budget constraint (equation of the straight line). Provide the value of the Y-intercept and slope.
Homework Answers
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the...
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the consumer's ability to trade goods X and Y. 4. (6 Points) For each description of a change in the budget line given below, state which of the following increases or decreases for the budget constraint variables would cause it: † Px + PxPy. Pytw, and I W. (a) The budget line rotates inward around its horizontal intercept (meaning that it's horizontal intercept does NOT...
Name 1. (3 pts.) Draw the budget lines representing the following information. In each case identify...
Name 1. (3 pts.) Draw the budget lines representing the following information. In each case identify the numerical value of the intercepts of the budget line and the slope. a. Initially assume: M-150, P 3, Py-5.Redraw the budget line on the same graph assuming l 90, P 3, Py 5 b. Initially assume: M- 150, Px 3, Py 5. Redraw the budget line assuming Px rose to $6 c. Initially assume: M : 150, Px-3, P,-5, Redraw the budget line...
Assume that you have exactly 100 hours of labor to allocate between producing goods X and...
Assume that you have exactly 100 hours of labor to allocate between producing goods X and Y. Your output of X and Y depends solely on the hours of labor you spend so the production functions, qi=fLifor i=X and Y, are: X=LX.5 and Y=LY.5 If you can sell your output of X and Y at the fixed prices PX = 10 and PY = 5, how much of goods X and Y would you produce to maximize your income? (Hint:...
Question 2 Carol has the following utility function: Uc = (xc)0.6 (4c)0.4 where xc and yc...
Question 2 Carol has the following utility function: Uc = (xc)0.6 (4c)0.4 where xc and yc are the quantities of x and y consumed by Carol. Carol's endowments are Tc = 100 and Yc = 100. Assuming the prices of x and y are denoted Px and Py respectively, Carol's budget constraint is given by: 100 (Px + Py) = Px&c + PyYc. (a) State the Lagrangian for Carol's consumer choice problem. (i.e. the Lagrangian used to derive his demand...
1.2 (10 mks each). In parts a) and b) below, assume px = $1, py =...
1.2 (10 mks each). In parts a) and b) below, assume px = $1, py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: (a) U = xy?, x, y = 0; (b) U=x1/3y2/3, x, y 2 0; (c) now, let px = p, Py = $5, 1 = $21, find the u-max solution for U = xy?, x, y = 0; (d) let px = 1, Py = p,...
(a) 1.2 (10 mks each). In parts a) and b) below, assume px = $1, Py...
(a) 1.2 (10 mks each). In parts a) and b) below, assume px = $1, Py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: U= xy?, x, y 2 0; (b) U = x1/3y2/3, x, y = 0; now, let px = P, Py = $5, I = $21, find the u-max solution for U = xy?, x, y 2 0; let px = 1, Py =p, I =...
uestion 1) 2 points .Suppose a person wants to allocate income () between two products H...
uestion 1) 2 points .Suppose a person wants to allocate income () between two products H (on the horizontal axis) and S (on the vertical axis) are given: PH-1:Ps-8:1-100: a. Write the equation of the budget line b. Compute the horizontal intercept& write the interpretation of it c. Compute the vertical intercept& write the interpretation of it d. Compute the slope and write the interpretation of it Question 2) 2 points .Consider information in question 1 to be the baseline...
Please answer question 2 uestion 1) 2 points . Suppose a person wants to allocate income...
Please answer question 2
uestion 1) 2 points . Suppose a person wants to allocate income () between two products H (on the horizontal axis) and S (on the vertical axis) are given: PH-1:Ps-8:1-100: a. Write the equation of the budget line b. Compute the horizontal intercept&write the interpretation of it c. Compute the vertical intercept& write the interpretation of it d. Compute the slope and write the interpretation of it Question 2) 2 points .Consider information in question 1...
please calculate carefully The demand for good (Qx) is given by the following equation: Qx =...
please calculate carefully
The demand for good (Qx) is given by the following equation: Qx = 20,200 - 12.5 Px + 5 Py-M + 1.5 Ax Suppose the firm spends $3,000 per week on advertising (Ax), Px is $80, Py is $60, and income per capita (M) in the market area is $22,000. (a) Calculate the elasticity of demand for good X with respect to its own price, the price of good Y, and Income per capita. (3) (b) Calculate...
A) Suppose U = min[X, 3Y] and I=12, Px=1 and Py=5. Find X* and Y*. B)...
A) Suppose U = min[X, 3Y] and I=12, Px=1 and Py=5. Find X* and Y*. B) Draw an indifference curve and a normal linear budget constraint such that there is a tangency point (where MRS= price ratio) that is not the optimal bundle. C) Suppose U=X∙Y5. Find X* and Y*. D) Suppose U = 5∙X + 2∙Y and I=12, Px=2 and Py=1. Find X* and Y*.
3. (3 Points) Intuitively describe what the slope of the budget line tells us about the consumer's ability to trade goods X and Y. 4. (6 Points) For each description of a change in the budget line given below, state which of the following increases or decreases for the budget constraint variables would cause it: † Px + PxPy. Pytw, and I W. (a) The budget line rotates inward around its horizontal intercept (meaning that it's horizontal intercept does NOT...
Name 1. (3 pts.) Draw the budget lines representing the following information. In each case identify the numerical value of the intercepts of the budget line and the slope. a. Initially assume: M-150, P 3, Py-5.Redraw the budget line on the same graph assuming l 90, P 3, Py 5 b. Initially assume: M- 150, Px 3, Py 5. Redraw the budget line assuming Px rose to $6 c. Initially assume: M : 150, Px-3, P,-5, Redraw the budget line...
Question 2 Carol has the following utility function: Uc = (xc)0.6 (4c)0.4 where xc and yc are the quantities of x and y consumed by Carol. Carol's endowments are Tc = 100 and Yc = 100. Assuming the prices of x and y are denoted Px and Py respectively, Carol's budget constraint is given by: 100 (Px + Py) = Px&c + PyYc. (a) State the Lagrangian for Carol's consumer choice problem. (i.e. the Lagrangian used to derive his demand...
1.2 (10 mks each). In parts a) and b) below, assume px = $1, py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: (a) U = xy?, x, y = 0; (b) U=x1/3y2/3, x, y 2 0; (c) now, let px = p, Py = $5, 1 = $21, find the u-max solution for U = xy?, x, y = 0; (d) let px = 1, Py = p,...
(a) 1.2 (10 mks each). In parts a) and b) below, assume px = $1, Py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: U= xy?, x, y 2 0; (b) U = x1/3y2/3, x, y = 0; now, let px = P, Py = $5, I = $21, find the u-max solution for U = xy?, x, y 2 0; let px = 1, Py =p, I =...
uestion 1) 2 points .Suppose a person wants to allocate income () between two products H (on the horizontal axis) and S (on the vertical axis) are given: PH-1:Ps-8:1-100: a. Write the equation of the budget line b. Compute the horizontal intercept& write the interpretation of it c. Compute the vertical intercept& write the interpretation of it d. Compute the slope and write the interpretation of it Question 2) 2 points .Consider information in question 1 to be the baseline...
Please answer question 2
uestion 1) 2 points . Suppose a person wants to allocate income () between two products H (on the horizontal axis) and S (on the vertical axis) are given: PH-1:Ps-8:1-100: a. Write the equation of the budget line b. Compute the horizontal intercept&write the interpretation of it c. Compute the vertical intercept& write the interpretation of it d. Compute the slope and write the interpretation of it Question 2) 2 points .Consider information in question 1...
please calculate carefully
The demand for good (Qx) is given by the following equation: Qx = 20,200 - 12.5 Px + 5 Py-M + 1.5 Ax Suppose the firm spends $3,000 per week on advertising (Ax), Px is $80, Py is $60, and income per capita (M) in the market area is $22,000. (a) Calculate the elasticity of demand for good X with respect to its own price, the price of good Y, and Income per capita. (3) (b) Calculate...
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