Budget line and his highest attainable indifference curve

Reference no: EM131198512

Johannes has a utility function given by U=xy/(x+y) where x is the amount of product 1 consumed per period and y is the amount of product 2 consumed per period. Johannes’ monthly income is \$200.

if the first 50 units of product 1 sell for \$2 per unit but for x>50 the price of product 1 falls to \$1 per unit. Assume Johannes can buy as much of product 2 as he likes at a constant price of \$2 per unit.

Find Johannes’ utility maximizing consumption levels for products 1 and 2 . Illustrate your answer with a diagram showing Johannes’ budget line and his highest attainable indifference curve.

Balancing confidentiality of individual health information

Balancing the confidentiality of individual health information with the need to protect public health, the HIPAA Privacy Rule expressly permits certain disclosures of protecte

What is the required reserve ratio

if the required reserve ratio is 10 percent, what is the monentary multiplier? if the monetary multiplier is 4, what is the required reserve ratio?

Represented by the utility function

Ely's preferences for bread and soup can be represented by the utility function U(S,B) = S(1 + B). For this utility function, MUS = 1 + B and MUB = S. Soup costs \$1 per pint a

Government is interested in subsidizing local production

Assume that the state government is interested in subsidizing the local production of steel. The current price of steel is \$1600 per ton and the government wants to provide a

Quality Motors, Inc., refused to sell a car to Hays because he was only 16 years old. However, Quality told Hays that they would sell the car to an adult and then show Hays ho

Perfectly competitive firm

Pete’s Pie Shop is a perfectly competitive firm. If the total output of pies in Pete’s Pie Shop increases from 20 per hour to 30 per hour as he hires the second worker, then.

What is his value-at-risk level

Suppose the total value of Jame’s investment is normally distributed with the mean equal to \$5, 000 and standard deviation of \$1, 000. What is his Value-at-Risk (VaR) at 1% le

Make a final decision regarding the international aspects

As an owner of a visible U.S. business that is valued in the community, you are making a final decision regarding the international aspects of a business decision, and you dec