User Account

All Pages

Draw babsie budget constraint

Assignment Help Business Economics
Reference no: EM132078730

Question #1: Babsie is a daughter related to Ronald Blump who is a wealthy billionaire. She only consumes Chanel 5 (perfume) and sushi. Suppose the price of a one sushi is $10, the price of a bottle of Chanel 5 is $15, and she has an income of $200. Her father provides her the allowance each month.

  1. Draw Babsie's budget constraint. Show which bundles are in her feasible set and which are not. Briefly discuss what the slope and intercepts of the budget constraint mean.
  2. Suppose that the government imposes a 100% tax on Chanel 5 so the price to Roland rises to $30 per bottle. Show how her budget constraint changes. Discuss what happened to her feasible set. Is she likely to care that the price has risen?

Question #2: Suppose the return on a one year bond from Ford Motor is given by the following table:

Probability

Rate of Return

0.1

1%

0.7

15%

0.2

3%

a. Does this probability distribution satisfy the characteristics of a probability distribution?

b. What is the expected return on this bond? Show your work!!

c. How does the expected utility differ from an expected return? Explain

Question#3:The following is a graph of Albert's Sweet Potato Farm located in Bensenville, Arkansas which is a perfectly competitive firm.

Answer the following questions based on this graph:

a. What is the profit maximizing price for this firm? Profit maximizing output?

b. Will Albert's Sweet Potato Farm earn a profit? Explain.

c. If Albert's Sweet Potato Farm is earning a profit, how much profit is being earned?

d. What is the amount of marginal revenue? Average revenue?

e. What is the amount of average total cost (ATC)?

f. How much total profit is being earned by Albert's Sweet Potato Farm? Total cost?

g. What are the characteristics for a perfectly competitive firm? Just list them.

Question #4: Short Answer Questions-please answer the following questions

a. If themarginal revenue is less than the marginal cost, what should a profit maximizing company do?

b. In a perfectly competitive graph, how does one calculate the economic profit?

c. What it is the shutdown point in a perfectly competitive firm?

d. Briefly what is the difference between economies of scale and diseconomies of scale? Why is it important to the firm?

e. Given the following total cost functionTC(q) = 1000 + 13q. Find the fixed cost, variable cost, average total cost, and the marginal cost. How do you know that these costs are in the short-run? Explain.

Reference no: EM132078730

Questions Cloud

Original uber operating model exploit : What economic inefficiencies does the original Uber operating model exploit? How does your answer change for drivers who rent cars to provide Uber services?
What are the challenges in implementing a global alliance : What are the challenges in implementing a global alliance. Once an alliance is reached, what steps are involved in strategic implementation of the venture?
Employment brand is a marketing approach to recruiting : Recall that an Employment Brand is a marketing approach to recruiting, retaining and engaging employees.
Describe the art of negotiation in a global situation : Describe the art of negotiation in a global situation. What are the stages of negotiation and what role do styles of negotiation play.
Draw babsie budget constraint : Draw Babsie's budget constraint. Show which bundles are in her feasible set and which are not. Briefly discuss what the slope and intercepts of the budget
The recent scandals in hollywood and associated firings : Given the recent scandals in Hollywood and associated firings, do you think companies should have stronger policies or take more immediate action
Market versus managed economy : Throughout the course we have come across a battle of ideas - should the unrestrained market dictate how individuals interact, or should the rules
Why some argue that the optimal capital structure : Discuses why some argue that the optimal capital structure involves using as much debt as possible when investing in real estate.
What are the client final and interim deliverables : What are the client’s final and interim deliverables?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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