Consider a city of 200 people (100 rich and 100 poor) and two neighborhoods (100 people in each). both groups generally prefer to live with rich people and are willing to pay a premium for living with a fraction of rich people that is larger than 50%. poor people’s premium curve is given as p(poor)= 0.9x^2, where x is the percentage ofrich above 50% (e. g., if there are 52% rich, x will be 2). rich people’s premium curve is given by p(rich)= 35x-0.1x^2. what is the equilibrium outcome? explain.

Explanation:

Step 1. Given information.

Step 2. Formulas needed to solve the exercise.

Step 3. Calculation and step 4. Solution.

P(poor) = p (rich)

0.9x2 = 35x - 0.1x2

1x2 = 35x

x = 35

x is the percentage of rich above 50%, thus there are 35% rich people above 50%.

P (poor) = 1102.5

P (rich) = 1102.5

The equilibrium premium is $1,102.5

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'