Practical problems in price theory

Assignment Help Microeconomics
Reference no: EM1372

Problem: Warming Up!

Luke likes to consumer CDs (good1) and pizzas (good 2). His preference over both goods is given by the utility functio

U(x1; x2) = x21 x42.

If Luke allocates $200 to spend on both goods and if a case of CDs costs $20 and a pizza costs $10, how many cases of CDs and pizzas would he consume in order to maximize his utility subject to his income. Show your work and illustrate your answer graphically.

Summary:

The problem in economics in price theory deals with deriving maximum marginal utility and marginal rate of substitution.

Reference no: EM1372

Questions Cloud

Marketing plan - create a new product : The assignment in marketing is about competitive analysis for a new product namely "heated insoles". These heated insoles can be put in shoes and they can protect the wearer's feet by keeping them warm during cold winters.
Case study in strategic plan adelphi art centre : Strategic plan or strategic planning of  Adelphi Art Centre in Adelphi, Australia.
Yamato corporation analysis - harvard case study : Please refer to the PDF for the Case Study and questions.The case study from Harvard Business School is about Yamato Corporation, a parcel delivery company which provides door to door delivery in Japan.
Practical problems in price theory : The problem in economics in price theory deals with deriving maximum marginal utility and marginal rate of substitution and price elasticity of demand.
Practical problems in price theory : The problem in economics in price theory deals with deriving maximum marginal utility and marginal rate of substitution.
An overview of wireless lan security - term paper : Computer Science or Information Technology deals with Wireless LAN Security. Wireless LAN Security is gaining importance in the recent times. This report talks about how vulnerable are wireless LAN networks without any security measures and also talk..
Application of nash equilibrium and game theory : Application of Nash Equilibrium and Game Theory with examples
Caselet on mcdonald’s vs. burger king - waiting time : Caselet on McDonald’s vs. Burger King - Waiting time

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Firms operating under cournot competition or cournot market

The details about three identical firms operating in Cournot competition are given. The demand curve with marginal revenue, profit maximization, optimum quantity, total demand and market price related questions are answered.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  Firms operating under cournot competition or cournot market

The details about three identical firms operating in Cournot competition are given. The demand curve with marginal revenue, profit maximization, optimum quantity, total demand and market price related questions are answered.

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Merger and acquisition of firms operating under cournot comp

The question is that if two firms in the Cornout market merge into one firm, what would the merger result in? how much of marginal cost would prevail in the market, etc are answered in a detailed in manner in the solution.

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

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!

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