What is the equation for her budget line

Assignment Help Business Economics

Reference no: EM133364259

Questions: Leah loves buying shoes and going out to dance. Her utility function for pairs of shoes, X, and the number of times she goes dancing per month, Y, is given by ?? (?? , ?? ) = 20XY2+ 100. Now suppose that a pair of shoes sells for $10 and it costs Leah $5 to spend an evening out dancing. And assume that she has $90 to spend on clothing and dancing. You are now asked to derive consumer equilibrium.

a. What is the equation for her budget line? Draw it, and find the slope, y-intercept, and x-intercept.

b. Use math to solve for her optimal bundle. Show all works to find an optimal bundle. Hint. MRSx,y = - MUx / MUy

c. Show how to determine this bundle in a diagram using indifference curves and a budget line.

d. At an optimal choice, what is the level of utility?

Reference no: EM133364259

Questions Cloud

Discuss supermax prisons. how are they operated and managed : Discuss supermax prisons. How are they operated and managed? What are the advantages and disadvantages of these prisons? Can anyone be rehabilitated

How did you discover your individual identity : How did you discover your Individual identity from your collective identity List and 5 main elements an organization needs in order to create a company

Should the public pay for the attorneys in these civil cases : Do you think that counsel should be given to indigent defendants for civil cases? (Divorces, Child Custody hearings? Should the public pay for the attorneys

What characteristics child protective service investigators : What characteristics child protective service investigators are sources of motivation and what characteristics may lead to dissatisfaction or burnout ?

What is the equation for her budget line : What is the equation for her budget line? Draw it, and find the slope, y-intercept, and x-intercept. Use math to solve for her optimal bundle.

What type of things do you observe when entering a court : What type of things do you observe when entering a court room in BC Canada? What are their order functions and what things might I hear and see?

Why basic logistic growth model may not fit most populations : Lag-time effects Lag-time effects are another example of why the basic logistic growth model may not fit most populations well. According to the text

Role of fuel injector to create spray of the liquid fuel : Explain the role of fuel injector to create spray of the liquid fuel? What physical processes take place before and after combustion?

Why do current diesel engines produce more pollutants : Why do current diesel engines produce more pollutants compared to SI engines? Describe at least one each of after-treatment systems used in SI and CI engines.

User Account

All Pages