Find equation that gives every bundle of cigarettes-coffee

Assignment Help Business Economics

Reference no: EM13853985

Jacob consumes 2 goods, coffee and cigarettes, 3 cigarettes can be traded for 1 cup of coffee in a free market, or 1 cup of coffee can be traded for 3 cigarettes, Jacob initially has 12 cigarettes and 5 cups of coffee.

1. Find an equation that gives every bundle of cigarettes and coffee that Jacob could trade for.

2. Jacob has an MRS = -5 when he is holding his inital bundle (cigs,coffee)=(12,5). Given the rate of exchange, would Jacob trade cigarettes for coffee, or coffee for cigarettes? Please explain a little

Reference no: EM13853985

Questions Cloud

What kinds of difficulties or opportunities might arise : As IT increasingly penetrates into our daily lives, do you think the younger generation might do work differently than earlier generations? If so, what kinds of difficulties or opportunities might arise from this difference

What are the different forms of terrorism : Why might governments nationalize firms and do they have added advantage or unfair one over the private owned firms? What are the different forms of terrorism and how can international managers meet this challenge?

Rewrite the long run cost function including the tax : Consider the following production function f(k,l) = k^1/3 + l^1/3. Suppose the government taxes labor at by an amount t per unit of labor. Rewrite the long run cost function including the tax.

Estimates that the cost of the transportation : Mrs. Smith earns $20 an hour. Normally, she has to drive into St. Cloud from her home (150 miles away) for a medical consultation. The drive is 2.5 hours each way, Mrs. Smith usually has a one-hour wait, and the consultation takes about an hour. Mrs...

Find equation that gives every bundle of cigarettes-coffee : Jacob consumes 2 goods, coffee and cigarettes, 3 cigarettes can be traded for 1 cup of coffee in a free market, or 1 cup of coffee can be traded for 3 cigarettes, Jacob initially has 12 cigarettes and 5 cups of coffee. Find an equation that gives eve..

A nation with large current account deficit : A nation with a large current account deficit is consuming more than it produces or living beyond its means. Is this necessary bad? What is your judgment for the United States?

Ways to a nations international transactions : Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..

A country produces only one good : A country produces only one good. It produced 5,000 units of the good during Year 1 and 6,000 units of the good in Year 2. The price of each unit of the good in Year 1 was $280 and it was $320 in Year 2. Suppose Year 1 is taken as the base year for t..

Fast-food restaurants post nutrition warning labels : State whether each of the following events will cause a movement along the demand curve for Big Mac or whether it will cause the demand curve for Big Mac to shift? If the demand curve shifts, indicate whether it will shift to the left or to the right..

User Account

All Pages