1-Using the following budget constraint: 200 = 1x + 2Y, Utility U = XY A. How...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1-Using the following budget constraint: 200 = 1x + 2Y, Utility U = XY A. How many Xs and Ys do you buy, how do you divide your budget, and what is the level of utility achieved? B. The government grants a Subsidy (the opposite of a tax) of $1 on Y. C. What are the new quantities of X and Y purchased? D. What is the total amount the government spends on the Subsidy? E. What is the level of Utility achieved? F. If the same amount of Subsidy is added to income would you achieve a higher utility level? Calculate, Graph and Explain using the logic of the Lump-Sum Principle we saw in class 1-Using the following budget constraint: 200 = 1x + 2Y, Utility U = XY A. How many Xs and Ys do you buy, how do you divide your budget, and what is the level of utility achieved? B. The government grants a Subsidy (the opposite of a tax) of $1 on Y. C. What are the new quantities of X and Y purchased? D. What is the total amount the government spends on the Subsidy? E. What is the level of Utility achieved? F. If the same amount of Subsidy is added to income would you achieve a higher utility level? Calculate, Graph and Explain using the logic of the Lump-Sum Principle we saw in class
Expert Answer:
Answer rating: 100% (QA)
A To determine the optimal quantities of X and Y the budget should be allocated in a way that maximizes utility The budget constraint is given as 2001X 2Y Lets solve for the optimal quantities by maxi... View the full answer
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-1259290619
9th edition
Authors: Michael Baye, Jeff Prince
Posted Date:
Students also viewed these economics questions
-
A sum of money invested at compound interest amounts to Rs 10,816 at the end of the second year and to Rs 11,248.64 at the end of the third year; find the rate of interest and the sum invested. In...
-
Let A, B be sets. Define: (a) the Cartesian product (A B) (b) the set of relations R between A and B (c) the identity relation A on the set A [3 marks] Suppose S, T are relations between A and B, and...
-
In a Hopfield neural network configured as an associative memory, with all of its weights trained and fixed, what three possible behaviours may occur over time in configuration space as the net...
-
Organizational buyers are ________.
-
Select an industry of interest such as automobile, hospital and banking. Identify and describe some of the problems affecting the industry where "business systems application" may be used. An example...
-
What is the difference between alternate depths and sequent depths?
-
Explain the difference between total absorption costing and activity-based costing.
-
String Chains: Given an array of words representing your dictionary, you test each word to see if it can be made into another word in the dictionary. This will be done by removing characters one at a...
-
The function f(x): = 8x X+3 is one-to-one. Find its inverse and check your answer.
-
Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2018. The cost of the investment was equal to the book value interest acquired. Lansing Company operates two...
-
Java data structure . 2. (20 pts) Complete the implementation of the static method isSorted () below. If List list is null, throw a NullPointerException. The method should return true if the number...
-
Create a mobile application using Java programming: A Spinner is needed to advertise 3 tourist tours that are on sale (Zoo, Beach, Pitch Lake). A zoo tour costs $500, a Maracas tour costs $600 and a...
-
Joseph Moore is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and...
-
Q.4(a) AB and AC are similar uniform rods, of length a, smoothly joined at A. BD is a weightless bar, of length b, smoothly joined at B, and fastened at D to a smooth ring sliding on AC. The system...
-
What is Marketing plan direction ? 2. What is marketing plan of G & E Automotive Solutions ? 3. What is Diversification of G & E Automotive Solutions? 4. What is the marketing development of G & E...
-
You have an apartment for rent. One potential tenant has promised to sign an annual lease for eight years, with each year's rent (paid at the end of the year) of $32,000. Rather than make yearly...
-
20 3 points Aaron Company has a process costing system. All materials are Introduced when conversion costs reach 50 percent. The following Information is available for physical units during March....
-
Explain how two samples can have the same mean but different standard deviations. Draw a bar graph that shows the two samples, their means an standard deviations as error bars. T S
-
In a two-player, one-shot, simultaneous-move game, each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $400. If both players choose strategy B,...
-
Suppose that a CEO's goal is to increase profitability and output from her company by bolstering its sales force and that it is known that profits as a function of output are = 40q 2q2 (in millions...
-
Last month you assumed the position of manager for a large car dealership. The distinguishing feature of this dealership is its "no hassle" pricing strategy; prices (usually well below the sticker...
-
Andreas Delons Compensation. Andreas Delon is a French citizen who has been offered the position of CEO of LakePharma, a large French pharmaceuticals firm. LakePharma produces high-quality chemicals...
-
EuroVirtuals EPS Sensitivity to Exchange Rates (A). On January 15, 2015 the Swiss National Bank (SNB) decided to unpeg the franc, which was fixed at CHF1.20/ since 2011. Suppose the SNB was to...
-
EuroVirtuals Consolidated Earnings. EuroVirtual pays different tax rates for each of its country operations. a. What are its earnings per share in EUR after deducting taxes? b. What is the proportion...
Study smarter with the SolutionInn App