What is coreys optimal consumption basket given his budget

Assignment Help Econometrics
Reference no: EM13208517

The utility that Corey obtains by consuming hamburgers (H) and hot dogs (S) is given by U(H,S) = ?H + ?S+4. The marginal utility of hamburgers is 0.5/?H and the marginal utility that steaks is equal to 0.5/?S+4

a) Sketch the indifference curve corresponding to the utility level U=12.

b) Suppose that the price of hamburgers is $1 per hamburger and the price of steak is $8 per steak. Moreover, suppose that Corey can spend $100 per month on these two foods. Sketch Corey's budget line for hamburgers and steak given this budget.

c) Based on your answer to parts (a) and (b), what is Corey's optimal consumption basket given his budget?

Reference no: EM13208517

Questions Cloud

Write and explain the definition of composition in c++ : Write and explain the definition of composition in C++ and how it is useful in writing object-oriented programming. Also, explain how it is different from inheritance and how both inheritance and composition are useful in developing object-oriente..
How it utilizes it and did the designer or programer choose : 1-direct manipulation 2-menu selection 3-form fill-in 4-command language 5-natural language For each one,provide a software example you've used that utilizes it, and how it utilizes it and did the designer or the programer choose the correct style..
What were thought to be unattainable heights : In 1993, Tim Berners-Lee created the Web and the bubble began. The bubble describes the amazing stock run of Internet companies, when their values soared to unbelievable and what were thought to be unattainable heights from 1993 to 2001.
Write a program keeps an appointment calendar in database : Write a program that keeps an appointment calendar in a database.
What is coreys optimal consumption basket given his budget : Suppose that the price of hamburgers is $1 per hamburger and the price of steak is $8 per steak. Moreover, suppose that Corey can spend $100 per month on these two foods. Sketch Corey's budget line for hamburgers and steak given this budget.
Is assumption that more is better satisfied for goods : On a graph with on the horizontal axis and on the vertical axis, draw a typical indifference curve (it need not be exactly to scale, but it should accurately reflect whether there is a diminishing ). Indicate on your graph whether the indifference..
What is the amount of the equal monthly payment : suppose you take out a car loan of $10,000 with an interest rate of 12% compounded monthly. you will pay off the loan over 48 months with equal monthly payments. a) what is the monthly interest rate b) what is the amount of the equal monthly paymen..
Which of the following statements are true : Which of the following statements are true? Select one or more
Explain ph values would you expect from the addition : Which of the following pH values would you expect from the addition of a small amount of a dilute solution of a strong base?

Reviews

Write a Review

Econometrics Questions & Answers

  As an analyst how would you view the acquisition

According to the Wall Street Journal, merger and acquisition activity in the first quarter of 2004 rose to $5.3 billion - an investment level not seen since the second quarter of 2001. Approximately three-fourths of the 78 first-quarter deals occu..

  Which investment should the individual choose

An individual has to choose between investment A and investment B. The individual estimates that the income an dprobability of the income from each investment are as given in the following table. Using Excel statistical tools, calculate the standar..

  Are any of the stocks an obvious buy compared

Given the following additional data: HPG T CSCO 5 year expected dividend growth rate(%): 8.44 4.04 4.68 Long term growth rate after 5 years (%) 5.5 2.0 5.5 Stock Price($) dividend($ annual) Hewlett Packard (HPQ) 25.63 0.48 AT&T (T) 29.39 1.74 Cisco S..

  What is the expected wage in the city

Each member of the family has the opportunity to migrate to the nearest city where there are two different types of jobs. Informal jobs are available to everybody and pay $200. Formal sector jobs are more difficult to get and pay $800. The probabi..

  Calculate the value of the government budget surplus

Compare the equilibrium levels of consumption C, government spending G, and planned investment I in Parts g and h. Based on this comparison, why might some economists prefer expansionary fiscal policy while others prefer expansionary monetary poli..

  Computerized regression program

Lenny's, a national restaurant chain, conducted a study of factors affecting demand. The following variables were defined and examined for a random sample of thirty of its restaurants:

  Derive the expression for marginal rate of substitution

How much of each good will he demand in this case? (The price of x1 is 3$ but his income has decreased)D) Calculate utilities obtained by bundles without tax and with income tax. Draw Jack's best bundles in a graph. (Budget curves, best bundles an..

  What rate of nominal wage growth will workers seek

Assume that workers, employers and investors all believed that inflation in the coming year would equal the annualized rate of inflation experienced in the past 6 months. Also assume that workers had been receiving nominal wage gains of 5% during ..

  What is probability that annual return given is positive

Suppose that a mutual fund has an annual rate of return that is normally distributed with a mean of 10% and a standard deviation of 4%. What is the probability that the annual return in a given year will be negative

  What is the predicted change in ticket sales

The elasticity of ticket sales with respect to the size of the local population is estimated to be about 0.7. Briefly explain what this number means. If the local population increases from 60,000 to 61,500,

  Derive the components of the demand curve

Suppose that the current price of oil is $60 per barrel and the quantity sold is 90 million barrels per day. Assume that the supply and demand curves for oil are linear. The current estimates of the price elasticity of supply and demand in the U.S..

  What will the fund amount to after 7 years

Semiannual deposits, beginning with $500 and increasing by $100 with each subsequent deposit, are made into a fund paying a nominal 10 percent per year compounded continuously. What will the fund amount to after 7 years

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd