Q19) The answer is (e) there are multiple correct answers.
Since, the Marginal rate of substitutionab = MUa/MUb> 5
This means that Jack is willing to give more than 5 units of B for an additional unit of A.
Thus, Jack is better off whenever he has to give less than equal to 5 units for one additional unit of A and wrose off whenever he gains less than equal to 5 units of B for a unit loss of A
Thus, both (b) and (d) are correct => (e) is the correct answer.
Q2) In Cournot game both firms produce at the point, MR = MC
TR for Jack = (300 - 3M1 - 3M2)M1
=> MR = 300 - 6M1 - 3M2
MC = dTC/dM1 = 30
Thus, we have
300 - 6M1 - 3M2 = 30
By symmetry we have, M1 = M2
=> 270 = 9M1
=> M1 = M2 = 30 (d)
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