Question

Economic value : U(C₁, C₂, C₃, C₄, C₅) =C₁∙C₂∙C₃∙C₄∙C₅

As a mathematical function, does U have a maximum or minimum value?

What values of C_i correspond to the minimum value of U? What values of C_i correspond to the maximum value of U?

Do these values of C_i make sense from an economic standpoint?

Now let us connect the idea of economic utility to actual dollar values. To keep the values more manageable, we will use household income rather than the entire state budget, and retail costs and measures rather than industrial ones.

Find the Median Household Income for Mesa, AZ for the most recent year possible.

Then find the dollar cost in Mesa, AZ for a Penny, a pound of Ground Beef, a pair of Jeans, fresh Orange Juice, and a Movie Ticket. Record these prices as P₁, P₂, P₃, P₄, and P₅ respectively.

Construct an equation using Median Income, the C_i and P_i values that illustrates how much of each resource the Median Household can afford to purchase.

Given this restriction, do the maximum or minimum values of U change?

Do the values of C_i that give the maximum or minimum values change?

What are these new values?

How should the Median Household budget its Income so as to maximize its Economic Utility?

Median Household Income for Mesa, AZ: $54,700

Cost of a Penny: $0.02

Ground Beef: $3.32

Pair of Jeans: $39.25

Fresh Orange Juice: $3.25

Movie Ticket: $10.33

Answer 1

Date: Date : Solution : Median Household Income for Mesa, AZ: $ 54,700 Economic Value : UC C1, C2, C3, C4, C5) = C2G C3 C4 C5 I has the maximum value since I is the product of 16,6, (3, C4, C5. Therefore the values of Ci which correspond to the maximum عقرقرحلہولى لعمله مسلم Whereas the values of Ci which correspond to the minimum I value of Vare: -cz-62,-63,-(4, -65 The values of Gi doesn't make any sense from an economic stand pointa as value of Ci maké no sense in the economic function Cost of a Penny: $0.02 Ground Reef $3.32 Paix et Jeans: $3945 | Movie Ticket: $10.33 | Orange Juice : $.3.25 The prices are given as P1, P2, P3, P4, P5 || = stel 3.32 X 39.25 X 10.33 X 3.25) z $ 4374.83 'NDAMIZ 54,700, 12:50 4374.83

Date : Using Median Income Ci and Pi that illustrates Values (54700 + 3.32.+ 39,25+ | 3.25 +10.33) is $54756015 che The median Household budget is nearly $54800 The values of U change according to the prices minimum values Ciz Cs C4 C5 maximum values Ci z GC2