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Susan consumes apples and bananas. Her utility function is given by U(A,B) = AB where A is the quantity of apples and B is the quantity of bananas. Sarah is maximizing her utility by consuming 5 apples and 10 bananas. With the number of apples on the horizontal axis and the number of bananas on the vertical acis, what is the slope of her budget line?
Mike salary will stay at $60,000 per year until he retires. He currently has $82,345 in his retirement fund, which earns 7% annually. He is now 43, and he expects to live un
Show the payoff matrix and explain the reasoning in the prisoners' dilemma example where Larry and Duncan, possible criminals, will get one year in prison if neither talks;
How many pounds of 1-inch roofing nails will the job require, and what is the cost? How many 10-foot lengths of drip edge will finish the job, and at what cost? Finally, wha
Policymaking is much easier when the stae of the economy is easily observable than when there is uncertainty about how the economy is doing, as this problem illustrates. Sup
The poverty rate would be substantially lower if the market value of in-kind transfers were added family income. The largest in-kind transfer is Medicaid, the government hea
Ten years ago a machine cost $800,000. Now, the same machine costs $1,200,000. Calculate the average rate of inflation per year.2) An investor bought a tax-free provincial bo
With $300 million in state aid to attract 1,500 new jobs, the initial marginal social cost to Alabama taxpayers of attracting the Mercedes plant was $200,000 per job. Estima
Suppose that the exchange rate between the Polish Zloty and the U.S. dollar is currently 4 Zls to the dollar. The one year forward rate for the Zloty is 4.5 Zls to the dolla
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