Assume the price of every old edition microeonomic book

Reference no: EM1331497

The solution to Utility maximization

Sam enjoys collecting old editions of microeconomic theory books. Unfortunately, he has no income from employment, but he does accept bags of trash to be buried in his yard for a fee. Suppose the price of each old edition microeonomic book is $2, and San charges $1 for each bag of trash. Sam's utility is given by: U = min(2B, 20-T), where B is the number of old edition books, and T is the number of bags of trash collected by Sam. Note: U is the minimum of 2B and 20 - T, and so this is not a differentiable function.

A. With T on the vertical axis and B on the Horizantal axis, graph Sam's indifference curve for U = 4

B. Determine the values of B and T that maximize Sam's utility.

Reference no: EM1331497

Questions Cloud

Incremental cash flows : Discuss qualitatively how you might have incorporated the likely growth of digital photography in the sales projections developed above? (Remember hindsight is 20-20.)

How we can implement a cardiac machine simulator in c++ : Keep track of the bug location; which could be an index into the memory array. Watch out for cells 0 and 99; they are special. Read the input tape from a file that starts with a number telling you how various items are on the tape.

Explaining individualism and collectivism affectivity : Define the following relationships: Individualism v collectivism affectivity

Use the nadler tushman congruence model : Using the Nadler-Tushman Congruence Model, conduct an analysis of this chosen company's outputs. Remember that outputs exist at the individual, group and organizational levels and that there are often differences between the output goals an organizat..

Assume the price of every old edition microeonomic book : Assume the price of every old edition microeonomic book. Determine the values of B and T that maximize Sam's utility.

Literature review on organizational behaviour theories : Literature Review on Organizational Behaviour Theories - prepare a literature review to highlight how organizational behavioral theories apply to professional practice

Explain wireless internet : Do you believe wireless Internet connections will replace wired connections? Why or why not?

Indirect effects on project cash flow : Indirect Effects on Project Cash Flow, Provide an example of an Opportunity Cost that would arise in your firm when considering a new project.

Show the role of benefits in compensation : Show the role of benefits in compensation. Review the primary reasons an organization provides benefits to its employees

User Account

All Pages