Reference no: EM131424566
The Acme shoe company sells shoes individually. There is one giant bin that has right and left shoes mixed together. Anna, Betty, Carla, and Darlene all buy shoes at Acme. All four women have different shoe preferences.
• Anna is buying shoes for an art project. It doesn’t matter if they are right shoes or leftshoes. She just wants as many shoes as she can get.
• Betty is buying the shoes to wear. In order to make a pair she needs one right shoe and one left. Extra shoes that do not form a pair have no value to Betty.
• Carla doesn’t have arches in her feet. She would prefer to have pairs of shoes, but she can wear right shoes on left feet and vice versa.
• Unfortunately, Darlene lost her right foot in an accident. She has no use for right shoes For each woman draw a separate graph and do the following:
(a) Draw an indifference curve.
(b) Write a utility function that could represent the indifference curve.
(c) Describe the MRS between right and left shoes.
(d) Draw a budget constraint with right shoes and left shoes priced the same. Place the constraint so that each woman is maximizing her utility.
(e) Now suppose Acme discounts right shoes by 20%. Draw a new budget con-straint on each graph. Indicate which women benefit from the sale and which women do not.
What average annual rate will income per capita in the USSR
: Imagine the following goal of Lenin/Stalin at the beginning of the Soviet regime in Russia: to overtake (i.e. equal) and surpass the world’s industrialized economies in terms of GDP per capita. At what average annual rate will income per capita in th..
|
What will be the revenue and profit
: The Really Annoying owners see the change in profits from the price decrease in May and the projection for June. They decide to go back to a price of $10.00 and have 31,000 deliveries in June. They decide that they are only willing to manage enough b..
|
Interpreting sensitivity reports
: Interpreting Sensitivity Reports. The machining availability has dropped from 7 to 6.5. What impact will Thai have on the optimal solution and the optimal value? If profit margin for Y is decreased to 39, what would he te change in optimum value?
|
What are the firms monthly payments to the bank
: A company purchased a machine for $30,000. It paid 30% as a down payment and obtained a loan for the rest. The loan has a nominal interest rate of 11% compounded daily and the loan term is 10 years. What are the firms monthly payments to the bank?
|
Utility function that could represent the indifference curve
: The Acme shoe company sells shoes individually. There is one giant bin that has right and left shoes mixed together. Anna, Betty, Carla, and Darlene all buy shoes at Acme. All four women have different shoe preferences. Anna is buying shoes for an ar..
|
Suppose pens and pencils are substitutes
: Suppose pens(N) and pencils(L) are substitutes such that U(N, L) = N + 2 ∗ L. Draw an ordinary demand curve for pens when the price of pencils is taken exogenously to be pl
|
A modern story about ethical values
: A MODERN STORY ABOUT ETHICAL VALUES Privately rank the five characters in the following story from “best”=No 1, to “worst”= No. 5, according to your personal values.
|
Arc elastic with respect to income and your substitute
: Read the articles by Dravone and Gandal; Schepp; and Craft on different products and how the demand for them has been estimated, either correctly or incorrectly. Now read Appendix 4A Applications of Supply and Demand found in your text. Are they elas..
|
Quantity demanded in the absence of the storm
: A heavy snowstorm is predicted to occur in Boston on the same night as the city’s professional basketball team is playing a game. The snowstorm, if it occurs, will make it difficult for people to drive into the city. In anticipation of lower demand, ..
|