Suppose that the utility function of an enterprise consumer for coal (C) and natural gas (G)...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose that the utility function of an enterprise consumer for coal (C) and natural gas (G) is given by U(C,G) = a In(C) + (1 - a) In (G) where 0 < a < 1. Suppose the prices of coal and gas are $2 and $4 respectively and the enterprise consumer has a yearly energy budget of $100000. Suppose in addition that the government has chosen to ration coal because of climate concerns by allowing a maximum consumption of 25000 units (C≤25000). If a = 0.2, find the optimal consumption bundle of coal and gas. Does the coal rationing constraint influence consumer's choice and utility, and if so, how much? b. a. If a = 0.8, find the optimal consumption bundle. Does coal rationing constraint influence consumer's choice and utility, and if so, how much? Suppose that the utility function of an enterprise consumer for coal (C) and natural gas (G) is given by U(C,G) = a In(C) + (1 - a) In (G) where 0 < a < 1. Suppose the prices of coal and gas are $2 and $4 respectively and the enterprise consumer has a yearly energy budget of $100000. Suppose in addition that the government has chosen to ration coal because of climate concerns by allowing a maximum consumption of 25000 units (C≤25000). If a = 0.2, find the optimal consumption bundle of coal and gas. Does the coal rationing constraint influence consumer's choice and utility, and if so, how much? b. a. If a = 0.8, find the optimal consumption bundle. Does coal rationing constraint influence consumer's choice and utility, and if so, how much?
Expert Answer:
Answer rating: 100% (QA)
a If a 02 then the optimal consumption bundle of coal and gas is C 25000 G 8333333 The co... View the full answer
Related Book For
Federal Tax Research
ISBN: 9781285439396
10th edition
Authors: Roby Sawyers, William Raabe, Gerald Whittenburg, Steven Gill
Posted Date:
Students also viewed these accounting questions
-
1. What is the bank's net interest margin (NIM)? Is the bank performing better or worse than average? A) 2.54%, worse than average B) 3.38%, worse than average C) 4.00%, better than average D) 5.72%,...
-
Use the CCH IntelliConnect Citator to answer the following questions regarding Notice 2010-10: a. Where is the notice located in the Internal Revenue Bulletin? b. Where is the notice annotated? c....
-
Use the CCH IntelliConnect Citator to answer the following questions regarding the 19th revenue procedure of 2002: a. What does this procedure address? Which Code sections are involved? b. What is...
-
For the standard deductions, there are specified contribution tables to be followed as discussed in the previous modules. More examples: 1. Compute for Tita Pau's monthly, semi-monthly, weekly and...
-
You have just graduated from college and are looking to buy your rst car. Money is tight right now, so you are concerned with initial cost as well as ongoing expenses. At the same time, you dont want...
-
Certain production equipment used by Lazer Inc. has become obsolete relative to current technology. The company is considering whether it should keep or replace its existing equipment. To aid in this...
-
Consider a bank that conducts a microlending program in four stagesat dates zero, one, two, and three. 1. At date zero, the bank lends to thirty-five poor clients an amount 6,000 taka per person. At...
-
Lenexa State Bank has followed the practice of capitalizing certain marketing costs and amortizing these costs over their expected life. In the current year, the bank determined that the future...
-
55 36 62 36 47 54 46 61 Evaluate Kara's claim using a hypothesis test. Write the hypothesis for the test. Ho: = 55 Ha: 55 Ho: H = 55 Ha: <55 O Ho: = 55 H: > 55 O Ho: H = 51.591 Ha: 51.591 O Ho: " =...
-
1. what is the source of wave motion? 2. describe how a wave is different from a pulse. 3. if we double the frequency of a vibrating object, what happens to its period? 4. a railroad locomotive is at...
-
. Farrah Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%. Project 1 Project 2 Initial...
-
Many countries have been described as information money . How does this affect productivity measurement and productivity comparison between countries?
-
Compute the thrust required for take-off for a 3-spool turbofan given the following data: a) Flight conditions: M = 0.2, T = 288 K, P = 1 bar b) cH = 5, = 0.98, T = 5, f = 0.0177, hp = 45000 kJ/kg...
-
Gemini Inc. operates a goods store that caters for government, private individuals, and organizations. The company has three service departments and two operating departments. Data on the five...
-
Balance Company produces a single product - an athletic shoe pair. The shoe pair sells for $175 and has total variable costs of $80. The shoe pair requires 25 minutes of machine time. Production of...
-
1. New From CES 2020 Imagine you have partnered with a company to develop the next best gadget to be featured at an upcoming CES. What gadget would you create? (You can be motivated by trying to...
-
WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for 46.9 million, of which $18.8 million was allocated to goodwill. At the end of the current fiscal year, an...
-
Compare and contrast debt financing and equity financing as ways of starting a new business. Does one have an overall advantage over the other? What situation is more favorable to the use of debt...
-
Formulate a search query to determine whether your client can retroactively elect to change its accounting method. Give an example of an online search query using only the following Checkpoint...
-
Barrys wife, Terra, died in an accident, leaving him with four young children to raise on his own. Shortly after Terras funeral, Barry and the children move from the house that Barry and Terra owned...
-
Boxian Wu is a real estate developer in China. She recently sold an office building for 4 million yuan. She paid 2 million yuan for the land use rights and 1 million yuan for the cost of developing...
-
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