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Johnny is an impoverished college student who works at a bakery full time while attending school. After spending money on rent, tuition, and books, he only has $80/month left over to spend on food. The good thing about his job is that he gets to take home all the stale bread he wants. He only has to buy peanut butter and jelly in order to make sandwiches. The price of a jar of jelly is $1.60 and the price of a jar of peanut butter is $2.00. He likes to consume both subject to the utility function U=P1/2J1/2, where P is the number of jars of Peanut Butter and J is the number of jars of Jelly purchased per month. a. Find the number of each good purchased. b. Find the utility received from this per month. c. Suppose that the price of jelly rises to $2.50 per jar. With the original level of income, what is the consumption bundle with the new prices? d. Further, he is considering working a part time job on the weekends that will increase his income. What is the level of income necessary to give Johnny the same utility as he had before the price change? e. With the level of income in d, what is the consumption bundle with the new prices? f. What is the total change in quantity of jelly due to the price increase? How much of that change is due to the income effect, and how much is due to the substitution effect? g. Graph these income and substitution effects. (Show the optimal bundle before and after the price change, and illustrate the income and substitution effects)
Everything else held constant, when the nominal exchange rate in units of foreign currency per unit of domestic currency decreases, the ________ domestic assets ________.
Prepare critical analyses as a group project and present a PowerPoint presentation. This analysis will consist of researching current articles from any periodical or textbook.
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In part, because of the workplace origins of illness and accident insurance, the perception of the employer’s obligation to cover all or part of health insurance premiums persisted as the scope of coverage broadened and the costs increased. Now, risi..
A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment?
Elucidate using a diagram the substitution also income effect which would result from a change in the price of a normal good.
In criminology, Is there a correlation between economic crisis in America and the justice program spending by the government? Critical theorists state that when the economy turns downward, government funding for justice programs (prison construction)..
Assume that a Pfizer has a linear demand curve for Lipitor, a constant marginal cost curve (i.e. the marginal cost is a constant), and is a monopolist in this market.
During a war the government puts pressure on producers for heavy equipment, supplies, and services, making each more important.
Suppose Mike and Johnson produce two products- hamburgers and T-shirts. Mike produces 10 hamburgers or 3 T-shirts a day and Johnson produces 7 hamburgers or 4 T-shirts. Assuming they can devote time in making either hamburgers or T-shirts. Draw the p..
find the quatanties of capital and labor that maximize output,while at the same time satisfy the firms budget constraint. what will happen to the firms output if the budget is raised by 100?
Define also Elucidate the three important components of organizational architecture responsible for the success or failure of an organizational design
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