Graph the indifference curve implied by parts a through

Assignment Help Business Economics

Reference no: EM131424720

Suppose a person has $8 to spend only on apples and bananas. Apples cost $.04 each and bananas cost $.01 each. Furthermore, his preferences for apples (A) and bananas (B) can be represented by U = the square root of AB.

a) If A =5 and B=80, what will utitly be?

b) If A =10, what value of B will provide the same uititly in part a?

c) If A=20, what value of B will provide the same utility in parts a and b?

d) Graph the indifference curve implied by parts a through c.

e) Give the budget constraint, which of the points identified in parts a through c can be bought by this person?

f) show through some examples that every other way of allocating income provides less utility than does the point identified in partb. Graph this utility maximizing situation.

Reference no: EM131424720

Questions Cloud

Consider a linear supply curve that passes through origin : Consider a linear supply curve that passes through the origin: Qs = bP. Prove that PES =1 at every point along this relationship. Hint: PES = (P/Q)(1/slope).

Dominant-firm competitive fringe model : Can you identify any industries in your country that fit the Dominant-firm competitive fringe model? Using a diagram, show how much consumers benefit from buying from a dominant firm-competitive fringe rather than from a monopoly.

Function satisfies the underlying properties : Suppose that an individual has the following utility function U (x, y) = x^1/3 y^1/3, verify that this function satisfies the underlying properties (completeness, transitivity, more is preferred to less).

Hydraulic fracturing and horizontal drilling : New technologies, including hydraulic fracturing and horizontal drilling in the US have made it much less expensive to get oil to the market. In addition, there is lower worldwide demand. Show how the markets have responded to these changes.

Graph the indifference curve implied by parts a through : Suppose a person has $8 to spend only on apples and bananas. Apples cost $.04 each and bananas cost $.01 each. Furthermore, his preferences for apples (A) and bananas (B) can be represented by U = the square root of AB. Graph the indifference curve ..

Shortage or surplus and of how many units : Fill in whether there is a shortage or surplus and of how many units. Indicate whether there is a shortage or surplus and of how many units.

Price of stained glass in terms of oil : Terms of trade Suppose that Greece and Germany both produce oil and stained glass. Greece's opportunity cost of producing a pane of stained glass is 4 barrels of oil while Germany's opportunity cost of producing a pane of stained glass is 10 barrels ..

Elasticity of amys labor supply between the wages : Amy is a college student who lives in Dallas and does some consulting work for extra cash. At a wage of $25 per hour, she is willing to work 6 hours per week. At $35 per hour, she is willing to work 16 hours per week. Using the midpoint method, the e..

Price is measured in cents and quantity in ounces : Montresor Fortunato’s PED for amontillado (a pale dry sherry) is known to be 1.78 when price is measured in dollars and quantity is measured in bottles (32 oz.). What is his PED for this product if price is measured in cents and quantity in ounces?

User Account

All Pages