Answer both parts of this question. Each part is an independent question and there is more...
Answer both parts of this question. Each part is an independent
question and there is more weight on part ii).
i) A consumer consumes two goods, the quantities of which are x and
y, and whose total amount is 28. The price of x is $3, that of y is
$5 and his total budget on the two goods is $120. Use Cramer’s rule
to find the quantities of the two goods.
ii) An individual agrees to pay $6,000 per year for three years to payoff a car loan. His payments are always made at the end of each year. If the interest rate in year 1 is 3%, in year 2 is 3.5% and in year 3 is 4%, and if compounding is done twice a year, how much did the car originally cost? (That is, work out the price he must have agreed to pay for the car.)
Homework Answers
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Answer both parts of this question. Each part is an independent
question and there is more...
An individual agrees to pay $6,000 per year for three years to payoff a car loan....
An individual agrees to pay $6,000 per year for three years to payoff a car loan. His payments are always made at the end of each year. If the interest rate in year 1 is 3%, in year 2 is 3.5% and in year 3 is 4%, and if compounding is done twice a year, how much did the car originally cost? (That is, work out the price he must have agreed to pay for the car.)
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is...
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is 1. Hi S income is 1. His utility is given by is * and y. Px is the price of x. Py is the price of a) Calculate consumer's optim U(x,y) = xy s optimal choice of x and y under his budget.hu uncompensated demand) b) Derive the indirect utility function. c) Are these two goods normal goods? Why d) Derive the expenditure function....
What is the answer to part C? Note: The answer is not 0.6 Answer the questions...
What is the answer to part C?
Note: The answer is not 0.6
Answer the questions based on the relationship between real and nominal variables. Round answers to two decimal places as needed. When Joe started his job at the laundromat five years ago, his wage was $4.50 an hour. Today, his wage is $8.00 an hour. If Joe started his job in the base year, and his real wage is the same as when he started, what is the...
06 Question (3 points) e See page 149 Douglas consumes two goods, x and y. His utility function is u(x, y) = (x + y. I...
06 Question (3 points) e See page 149 Douglas consumes two goods, x and y. His utility function is u(x, y) = (x + y. In the questions below, give your answers to two decimal places. 1st attempt Part 1 (1 point) See Hint Let the price of good x be $2 and the price of good y be $10. Furthermore, assume that Douglas has $360.00 to spend on these two goods. How much of good x does Douglas demand?...
Utility maximization with more than two goods Suppose that there four goods Q, R, X and Y , avail...
Utility maximization with more than two goods Suppose that there four goods Q, R, X and Y , available in arbitrary non-negative quantities (so the the consumption set is R 4 +). A typical consumption bundle is therefore a vector (q, r, x, y), where q ≥ 0 is the quantity of good Q, r ≥ 0 is the quantity of good R, x ≥ 0 is the quantity of good X, and y ≥ 0 is the quantity of...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by the utility function uA(xA, yA) = xAyA , where xA is the amount of good A consumed by consumer A, and yA is the amount of good Y consumed by consumer A. The preferences of consumer B can be represented by the utility...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by the utility function uA(xA, yA) = xAyA , where xA is the amount of good A consumed by consumer A, and yA is the amount of good Y consumed by consumer A. The preferences of consumer B can be represented by the utility...
PART 2 - Short Answer, 8 points overall, point values are indicated for each part of...
PART 2 - Short Answer, 8 points overall, point values are indicated for each part of the question. 1. Suppose Henry has $8 of income to spend on his two passions: Mountain Dew and Red Bull. At the local convenience store, Henry can buy cans of Dew for $1 each and cans of Red Bull for $2 each. Assume he will spend all of his $8 on these two goods. The table below displays Henry's preferences. Quantity of Total utility...
Question 1 (20 marks) (a) A consumer maximizes utility and has Bernoulli utility function u(w)/2. The...
Question 1 (20 marks) (a) A consumer maximizes utility and has Bernoulli utility function u(w)/2. The consumer has initial wealth w 1000 and faces two potential losses. With probability 0.1, the consumer loses S100, and with probability 0.2, the consumer loses $50. Assume that both losses cannot occur at the same time. What is the most this consumer would be willing to pay for full insurance against these losses? (10 marks) (b) A consumer has utility function u(z, y) In(x)...
please answer both parts of the question. part A: Part B: Write an equation for the...
please answer both parts of the question.
part A:
Part B:
Write an equation for the polynomial graphed below 5 + 4 2+ 1 23 /4 -5 -4 3 -2 -1 -1 5 -2 -3 -4 -5 y(x) = Preview The polynomial of degree 4, P(x), has a root with 2 and roots with multiplicity 1 1. Given that P(x) goes through the point (5, 54), find a formula for P(x) multiplicity 2 at x at x 0 and x...
Question 2 (20 points) A consumer purchases two goods x ano y. The consumer's income is 1. Hi S income is 1. His utility is given by is * and y. Px is the price of x. Py is the price of a) Calculate consumer's optim U(x,y) = xy s optimal choice of x and y under his budget.hu uncompensated demand) b) Derive the indirect utility function. c) Are these two goods normal goods? Why d) Derive the expenditure function....
What is the answer to part C?
Note: The answer is not 0.6
Answer the questions based on the relationship between real and nominal variables. Round answers to two decimal places as needed. When Joe started his job at the laundromat five years ago, his wage was $4.50 an hour. Today, his wage is $8.00 an hour. If Joe started his job in the base year, and his real wage is the same as when he started, what is the...
06 Question (3 points) e See page 149 Douglas consumes two goods, x and y. His utility function is u(x, y) = (x + y. In the questions below, give your answers to two decimal places. 1st attempt Part 1 (1 point) See Hint Let the price of good x be $2 and the price of good y be $10. Furthermore, assume that Douglas has $360.00 to spend on these two goods. How much of good x does Douglas demand?...
PART 2 - Short Answer, 8 points overall, point values are indicated for each part of the question. 1. Suppose Henry has $8 of income to spend on his two passions: Mountain Dew and Red Bull. At the local convenience store, Henry can buy cans of Dew for $1 each and cans of Red Bull for $2 each. Assume he will spend all of his $8 on these two goods. The table below displays Henry's preferences. Quantity of Total utility...
Question 1 (20 marks) (a) A consumer maximizes utility and has Bernoulli utility function u(w)/2. The consumer has initial wealth w 1000 and faces two potential losses. With probability 0.1, the consumer loses S100, and with probability 0.2, the consumer loses $50. Assume that both losses cannot occur at the same time. What is the most this consumer would be willing to pay for full insurance against these losses? (10 marks) (b) A consumer has utility function u(z, y) In(x)...
please answer both parts of the question.
part A:
Part B:
Write an equation for the polynomial graphed below 5 + 4 2+ 1 23 /4 -5 -4 3 -2 -1 -1 5 -2 -3 -4 -5 y(x) = Preview The polynomial of degree 4, P(x), has a root with 2 and roots with multiplicity 1 1. Given that P(x) goes through the point (5, 54), find a formula for P(x) multiplicity 2 at x at x 0 and x...
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