Kamau's utility function for watching football (F) and drinking a soda (S) is given by the function (F,S)=F²S . Last month, the price of a football ticket was Ksh.100 and the price of Soda was Ksh.25. This month the price of soda has risen to Ksh.37.5, the price of a football ticet has remained the same. For both months, Kamau's income has remained to be Ksh750. Calculate Kamau's CS, CV and EV.
Q: One of the biggest benefits of creating a financial forecast of your company's financial statements…
A: c) The shortfall of projected cash reveals how much outside capital you need
Q: Consider a quantity competition setup with two firms simultaneously choosing the quantities. The…
A: The purpose of this question is to explain the Cournot duopoly, each firm makes production decisions…
Q: Zadie has utility over books (B) and journals (J) of the form U = B¹/2 + 1/2 How much will Zadie…
A: Utility is the satisfaction or happiness that an individual derives from consuming a good or…
Q: the economy had been operating at a full- employment equilibrium, a. Describe the macroeconomic…
A: The purpose of this question is to show the employment is the situation where economy operates at…
Q: The U.S. National Commission on Fiscal Policy and Reform has recommended changes to government…
A: ***Since the student has posted multiple questions, the expert is required to solve only the first…
Q: Economics Question: Explain the concept of "economies of scale." How does it influence a firm's…
A: This question asked us to explain the concept of "economies of scale," its influence on a firm's…
Q: R2) The only fruits Dana buys are apples (x) and/or berries (y). She spends $30 on fruits per month.…
A: Utility function shows the levels of benefits that consumer will get after consuming certain number…
Q: An increase in taxes when the economy is above full employment OA. increases; falls B. increases;…
A: The objective of the question is to understand the impact of an increase in taxes on aggregate…
Q: The graph shows the relevant cost curves for a perfectly (or purely) competitive firm. What value…
A: In economics, particularly general equilibrium theory, a perfect market, also called an atomistic…
Q: Which of the following statements is true? 1. Discrimination against women and blacks reduces the…
A: The objective of the question is to identify the correct statement among the given options.
Q: As the interest rate increases, the opportunity cost of _____. a. borrowing decreases b. past…
A: The opportunity cost is the cost of forgoing the next best alternative when making a decision. In…
Q: There are some data and information are available for a food company as represented in the following…
A: By plotting the given data points on a graph, we can see that the relationship between price and…
Q: Pick 1 current economic topic below and You will research and find an article that covers the topic…
A: Cost can be defined as a concept that shows the amount of expenditure and any other sacrifice such…
Q: Quantity efer to the provided supply and demand graph for a product. In the graph, line One solution…
A: Negative externality is an imperfect market situation where the socially desirable cost, price and…
Q: In problem 3(c), you found the optimal nondiscriminatory fixed fee-per unit charge pricing scheme…
A: Since subpart (c) requires content and reference to a specific Chapter 18, subparts (a) and (b) are…
Q: Although price discrimination never occurs in perfect competition, it may occur in monopolistic…
A: Here, in this question Price discrimination refers to the strategy used by firms to charge different…
Q: According to Chomsky & Herman, describes the idea that mass media are powerful ideological…
A: The objective of the question is to identify the term used by Noam Chomsky and Edward S. Herman to…
Q: Microeconomics includes all of the following EXCEPT. (A) the effect of increasing the money supply…
A: Microeconomics is a part of economics that focuses on the ways of behaving and interactions of…
Q: private good"
A: Private goods are a category of products in economics that exhibit essential traits: excludability…
Q: At the point where the consumption schedule intersects the 45-degree line: saving equals income. the…
A: The question is asking about the point on a consumption schedule where it intersects with the…
Q: The practice of posting a discrete schedule of declining prices for different ranges of quantities.…
A: Price discrimination is adopted by most monopolists to maximize their profit margin. As the…
Q: Inflation a. leads people to use more resources to reduce money holdings. There is no way it can…
A: The objective of the question is to understand the impact of inflation on the use of resources to…
Q: Your boss is very interested in the business opportunities in country Russia. He is about to meet a…
A: The objective of this question is to provide a brief overview of Russia's economic, political, and…
Q: Green accounting refers to the incorporation of depreciation of: a.physical and human capital in…
A: Green accounting, also known as environmental accounting, is a type of accounting that attempts to…
Q: Yoga lasses 30 6 D B 7 9 10 12 15 Pilates classes anuri has $300 to spend on Pilates classes and…
A: The indifference curve is the curve that shows the combinations of two goods that give the same…
Q: Price (per unit) 9 MO -8 Quantity (per period) (Figure: Marginal Decision Rule) If P1 is the market…
A: The Marginal Decision Rule in production is a guideline used by producers to determine whether to…
Q: In the short run, which cost is fixed and cannot be changed? a) Average cost b) Marginal cost c)…
A: Understanding the various sorts of costs in financial aspects is significant for examining business…
Q: Which is the correct formula for calculating the percent change in price from a shift in demand? O…
A: Elasticity measures the responsiveness of quantity demanded or supplied to changes in price or other…
Q: 3) A competitive firm's cost of producing q units of output is C = 18 + 4q +q2 Its corresponding…
A: The total cost function is the mathematical relationship between the total cost of production and…
Q: 5. Using the accelerator model in which the level of inventories in current period depends on the…
A:
Q: please read and answer the question below with details for every point i mentioned in the question…
A: A marketing budget serves as a fiscal blueprint delineating the expenditures related to a company's…
Q: The Production Function for Wilson Company Economists at the Wilson Company are interested in…
A: The purpose of this question is to shoq Cobb-Douglas production function is a widely used model to…
Q: When lives are equal adjustments to cash flows are not required. The MEAs can be compared by…
A: The Present Value (PV) or present worth (PW) is a calculation of how much a future cash flow (or…
Q: Consider two firms, i = 1; 2, producing differentiated products and engaged in Cournot a. Given the…
A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…
Q: Which of the following is not true about M1 (The most liquid component of the money supply)? It…
A: The objective of the question is to identify the incorrect statement about M1, which is the most…
Q: When you have one buyer in the market for labor and one seller this is called? A. A monoposony B. A…
A: The objective of the question is to identify the correct term for a market situation where there is…
Q: Suppose you are at a neighborhood yard sale and you purchase a small jewelry box for $5.00. After…
A: The question is asking about the ethical obligations in two different scenarios related to a…
Q: Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care…
A: The American Recovery and Reinvestment Act (ARRA) of 2009 was a law passed by the U.S. Congress in…
Q: 175 125 100 80 Price 270 322 C. $25,750. d. $20,375. 515 MC ATC AVC When the price of the good is…
A: The profit for a firm occurs when the firm sells higher quantity of goods and earns high revenue in…
Q: Question Four Assume the following IS-LM model: Expenditure Sector ADC+I+ G C = 130 + (4/5) YD YD =…
A: The objective of this question is to show the IS and LM schedules, find equilibrium levels of income…
Q: Second Example - Make vs. Buy A manufacturer makes 3 types of products, requiring differing amounts…
A: The main aim is to analyze the optimal strategy for profit maximization, taking into shown…
Q: Which of the following is not a possible defense against liquidity risk? A sufficient level of vault…
A: The objective of the question is to identify which among the given options is not a viable defense…
Q: 1. Assume that U = (x + 2)(y + 1), with Px, Py and M being prices per unit of good, good…
A: Given:U=(x+ 2 )(y+ 1) a). Derive the effect of change in Px on equilibrium x.First, let's set up the…
Q: A crime is witnessed by 3 citizens. Every citizen would like the police to be informed about the…
A: Game theory influences many elements of modern civilization, from pricing methods and efficacy to…
Q: Empirical results suggest that the COVID-19 shock was felt more by US banks than banks located…
A: The statement "Empirical results suggest that the COVID-19 shock was felt more by US banks than…
Q: Calculate the degree of imbalance in each year based on the data given in the table below for a…
A: The degree of imbalance in a workplace market may be assessed by studying the relationship between…
Q: Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If…
A: Externalities are essential in economics because they represent the unanticipated consequences of…
Q: Customer Relationships Hypothesis AssignmentInstructions: Complete this document and submit it to…
A: The provided questions have been answered from the generalized theories of 'Managerial…
Q: GDP
A: Gross Domestic Product (GDP) is a key indicator used to determine the monetary performance of a…
Q: 4. An increase in the labor force: Consider a onetime change in governme policy that immediately and…
A: The objective of this question is to show the Solow model, a one-time increase in the labor force,…
Step by step
Solved in 5 steps with 17 images
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate for the equivalent variation (EV) for the price change.Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate the change in consumer surplus from consuming the expensivemeals considering the price change (Hint: you need to compare his optimalconsumption bundle before and after the price change to get the change in CS).
- Questions 1. Will's utility from vacations (91) and meals (92) is given by the function U(V, M) = 91 x 92. Last year, the price of vacations was $200 and the price of meals was $50. This year, the price of meals rose to $75, while the price of vacations remained the same. Both years, Will had an income of $1500. (a) What is the compensating variation for the price change in meals? (b) What is the equivalent variation for the price change in meals?Brian spends his entire monthly income of $1200 on shoes (S) and pizzas (P). The price of a pair of shoes is $60, and the price of a pizza is $20. If he consumes 10 pairs of shoes and 30 pizzas, his MRS is 2P/1S. (A quantity of shoes is measured along the x-axis, and a quantity of pizza is measured along the y-axis.) His choice is optimal. True FalseRay buys only hamburgers and bottles of root beer out of a weekly income of $100. He currently consumes 20 bottles of root beer per week, and his marginal utility of root beer is 6. The price of root beer is $2 per bottle. Currently, he also consumes 15 hamburgers per week, and his marginal utility of a hamburger is 8. Is Ray maximizing utility at his current consumption basket? If not, should he buy more hamburgers each week, or fewer?
- Question 6 A consumer spends all of her income on two goods, coffee and doughnuts. She buys coffee at 25 cents per unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchased at 75 cents a unit with a total utility of 200 and a marginal utility of 24. To increase her total utility, the consumer should: Buy more coffee and less doughnuts Buy more of both goods Do nothing. She is currently maximizing utility with her limited budget. Buy less of both goods Buy more doughnuts and less coffee.Joe likes eating candy and drinking soda, The price of a bar of candy is $2 while the price of a can.of soda is $3. joe has a budeet of 529. Suppose that candy and soda can only be purchased and consumed as whole units (in other words it is impossible for Joe to purchase 1/3 of a bar of candy or A/5 of a can of soda). Furthermore, assume that it is impossible for Joe to spend more than his budget (that is, his total expenditure on candy and soda cannot exceed his budget). The following table describes the marginal benefit (expressed in $) he obtains from each bar of candy and can of soda Marginal Benefit from Marginal Benefit from Soda (in $) Unit Candy (in $) 180 180 160 150 3 140 120 60 5. 100 45 60 30 7. 40 15 8 10 -30 9. 60 -90 10 -100 -120 Joe's optimal consumption bundle includes (enter a numerical answer here) bars of candy and (enter o (enter a numerical answer here) cans of soda, and the total benefit he derives from the consumption of the optimal bundle is $ numerical answer…Anthony has set aside $120 each month for his favorite activities-buying records and going to concerts. The price of a record is $10, and the price of a concert ticket is $30. He currently consumes three records and three concerts each month. If the price of a concert increases to $40, the substitution effect predicts that Anthony will consume: A more records and concerts. B more records and fewer concerts. fewer records and more concerts. (D) fewer records and concerts.
- As Dr. Gonzalez drinks five beers, his total utility rises from 5 to 45 when he drinks one beer. His utility when he drinks two beers is 116, 143 when he drinks three beers, 235 when he drinks four beers, and 272 when he drinks five beers. What is his marginal utility of the fourth beer?EXERCISE 4 Milo spends £27 on stamps (S) and maple candy (C). His preferences for these goods are given by the following utility function: . Suppose that price per unit of S is £1.1 and the price per unit of C is £2.1. Write down Milo’s budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. In your graph, indicate the consumption bundle of 12 stamps and 6 maple candies. Can Milo afford this bundle? Explain. Find Milo’s optimal consumption bundle, both algebraically and graphically. Explain your reasoning. If the price of a stamp increases to £1.4, how should Milo’s income change for him to be as well off as before this change in prices? Discuss the implications of the price change from c) on Milo’s optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Milo’s demand for stamps and/or maple candy.Alex distributes his monthly income of $600 between two goods, movies and food. By spending his entire income on movies, he can enjoy a maximum of 20 movies. On the other hand, by spending his entire income on food he can consume a total of 60 units of food. Assume that food consumption is measured along the horizontal axis and the consumption of movies is measured on the vertical axis. Calculate the slope of Alex's budget line when the price of food increases to $20 while the price of movie remains unchanged. -2/3 - 1.5 -2 -3/4