What is optimal bundle of cups of coffee-dozens of donuts

Assignment Help Business Economics

Reference no: EM131240905

Consider Bob who only consumes donuts and coffee in fixed proportions. Bob consumes 2 donuts with each cup of coffee.

Write down a utility function that is consistent with Bob's preferences. Graph the indifference curves from part a with coffee on the horizontal axis. Write down a utility function that is consistent with Bob's preferences, however, a unit of donuts is now a dozen donuts (hence, bob consumes 1/6 units of donuts per cup of coffee. Graph the indifference curves from part c with coffee on the horizontal axis. If a dozen donuts cost $6 ($0.50 per donut) and a cup of coffee costs $2 and Bob has an income of $100, what is his optimal bundle of cups of coffee and dozens of donuts?

Reference no: EM131240905

Questions Cloud

If the gravitational field of earth were to increase : If the gravitational field of earth were to increase, would fish float to the surface, sink or stay at the same depth?

What is a third party payment system : How are providers paid and why do different patients pay different amounts for the same service? What is a third party payment system? Why aren't some charges reported as revenue for health care organizations?

Discuss the effect of the relative magnitudes : Discuss the effect of the relative magnitudes of E0 and B0 on the electron paths in parts (A) and (B).

Write down the equations for simulating the path : Write down the equations for simulating the path followed by the asset price in the stochastic volatility model in equations.

What is optimal bundle of cups of coffee-dozens of donuts : Consider Bob who only consumes donuts and coffee in fixed proportions. Bob consumes 2 donuts with each cup of coffee. Write down a utility function that is consistent with Bob's preferences. Graph the indifference curves from part a with coffee on th..

When interest rates are constant : ‘‘When interest rates are constant the IVF model correctly values any derivative whose payoff depends on the value of the underlying asset at only one time.'' Explain why.

What is the resistance of the wire : The magnetic flux that passes through one turn of a 22-turn coil of wire changes to 4.0 Wb from 8.0 Wb in a time of 0.024 s. The average induced current in the coil is 235 A. What is the resistance of the wire?

Generate a sample of the exponential distribution : MS455/MS555 Project - Simulation in Finance. Use the inverse transforms method to generate a sample of the exponential distribution with parameter θ, which is given by its density

Explain the importance of strategic planning and vision : Write a 550- to 600-word executive summary in which you articulate court purposes and responsibilities. Explain the importance of strategic planning and vision as foundations of successful court management. Include the following: Appraise the imp..

User Account

All Pages