Charlie is backstill consuming apples and bananas. His utility function is U(x A , x B )
Question:
Transcribed Image Text:
a. When the prices are Pa and pg and Charlie's income is m, the equation for Charlie's budget line is PAXA + PBXB = m. The slope of Charlie's indifference curve at the bundle (x4. XB) is -MU1 (XA, XB)/MU2(XA, XB) = Select.. The slope of Charlie's budget line is Select.. Charlie's indifference curve will be tangent to his budget line at the point (XA, XB) if the following equation is satisfied: Select... b. You now have two equations, the budget equation and the tangency equation, that must be satisfied by the bundle demanded. Solve these two equations for xA and Xg. Charlie's demand function for apples is XA(PA. PB. m) = Select... and his demand function for bananas is xg(PA.PB.m) =| Select... c. In general, the demand for both commodities will depend on the price of both commodities and on income. But for Charlie's utility function, the demand function for apples depends only on income and the price of apples. Similarly, the demand for bananas depends only on income and the price of bananas. Charlie always spends the same fraction of his income on bananas. What fraction is this? Select...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (15 reviews)
a When the prices are pA and p B and Charlies income is m the equation for Charlies budget line is p ...View the full answer
Answered By
Utsab mitra
I have the expertise to deliver these subjects to college and higher-level students. The services would involve only solving assignments, homework help, and others.
I have experience in delivering these subjects for the last 6 years on a freelancing basis in different companies around the globe. I am CMA certified and CGMA UK. I have professional experience of 18 years in the industry involved in the manufacturing company and IT implementation experience of over 12 years.
I have delivered this help to students effortlessly, which is essential to give the students a good grade in their studies.
3.50+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
Gentle Charlie, vegetarian that he is, continues to consume apples and bananas. His utility function is U(xA, xB) = xAxB. The price of apples is $1, the price of bananas is $2, and Charlies income is...
-
Charlotte loves apples and hates bananas. Her utility function is U(a, b) = a b2, where a is the number of apples she consumes and b is the number of bananas she consumes. Wilbur likes both apples...
-
We begin again with Charlie of the apples and bananas. Recall that Charlies utility function is U(x A , x B ) = x A x B . Suppose that the price of apples is 1, the price of bananas is 2, and...
-
Write a Fortran program that creates an integer array with values -123, -4, 5, 67, 890, and 12345. Prints out the array in several formatted ways. a. Print each element, on its own line, using a...
-
Assume that we are in another universe with different physical laws. Electrons in this universe are described by four quantum numbers with meanings similar to those we use. We will call these quantum...
-
From what you know about the stereochemistry of alkene addition reactions, predict the configurations of the products that would be obtained from the reaction of 2-butyne with the following: a. One...
-
What is the purpose of having a detailed event budget?
-
Olde Stone Mill Flour Company manufactures flour by a series of three processes, beginning in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging...
-
The table gives the number of deaths from prescription opioid pain relievers in the United States in the years 2000 to 2014. Year Number of 2000 2001 2002 2003 2004 2005 2006 2007 4,400 5,528 7,456...
-
The Culleye Corporation reported the following solvency ratios: _______________________ 2014 ____________ 2013 Debt to total assets ............56.0% ................. 52.8% Interest coverage...
-
Joe Grad has just arrived at the big U. He has a fellowship that covers his tuition and the rent on an apartment. In order to get by, Joe has become a grader in intermediate price theory, earning...
-
Percy consumes cakes and ale. His demand function for cakes is qc = m 30pc + 20pa, where m is his income, pa is the price of ale, pc is the price of cakes, and qc is his consumption of cakes. Percys...
-
Air enters a nozzle at 1.30 atm and 25 C with a velocity of 2.5 m/s. The nozzle entrance diameter is 120 mm. The exits the nozzle at 1.24 atm with a velocity of 90 m/s. Determine the temperature of...
-
What is operating system?
-
Assume Evco, Inc. has a current stock price of $52.28 and will pay a $1.80 dividend in one? year; its equity cost of capital is 13%. What price must you expect Evco stock to sell for immediately ?
-
Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 54,000 machine-hours would...
-
4) John owns 50 shares of Tyco Corporation (adjusted basis of $10,000). He sells all 50 shares for $8,000. A week later, he repurchases 50 shares of this stock for $7,000. Calculate John's realized...
-
Ganado's Cost of Capital. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.00%, the company's credit risk premium is 3.90%, the domestic beta is estimated at...
-
As at 30 September 2012 the Cash Book reports a bank overdraft of 10,240 whereas the bank statement reports a favourable balance of 5,680. Inquiries reveal as follows: (i) A cheque for 14,750 drawn...
-
Explain briefly what is meant by electronic data interchange (EDI). How does EDI affect a companys audit trail?
-
What is the dominant Nash equilibrium strategy for the repeated prisoners dilemma game when both players know that the game will end after one million repetitions? If you were going to run an...
-
The prices are (p 1 , p 2 ) = (2, 3), and the consumer is currently consuming (x 1 , x 2 ) (4, 4). Now the prices change to (q 1 , q 2 ) = (2,4). Could the consumer be better off under these new...
-
Suppose that player B rather than player A gets to move first in the sequential game described in this chapter. Draw the extensive form of the new game. What is the equilibrium for this game? Does...
-
Angela is entitled to a fixed annual payment of $15,000 from ABC Partnership without regard to the income of the partnership. Her share of the partnership income is 10%. After deducting the...
-
Rosie has $24,000 short-term capital loss, $10,500 28% gain and $9,000 0%/15%/20% gain. Which of the following statements is correct? a. Rosie has a $19,500 net capital gain b. Rosie has a $7,500...
-
Wyatt Company was formed on January 1, Year 1, when it acquired $50,000 cash from issuing common stock. Which of the following shows the impact of this transaction on Wyatt's accounting equation?...
Study smarter with the SolutionInn App