subject
Business, 26.02.2020 00:15 Nepnep682

Mr. A derives utility from martinis (m) in proportion to the number he drinks: U(m) = m. Mr. A is very particular about his martinis, however: He only enjoys them made in the exact proportion of two parts gin () to one part vermouth (). Hence, we can rewrite Mr. A's utility function as ,v) for various levels of utility. Show that, U(m) = U( g, v) = min

a. Graph Mr. A's indifference curve in terms ofg and regardless of the prices of the two ingredients, Mr. A wll never alter the way he mixes martinis

b. Calculate the demand functions for g and v

c. Using the results from part (b), what is Mr. A's indirect uility function?

d. Calculate Mr. A's expenditure function; for each level of utility, show spending as a function of and p,. Hint: Because this problem involves a fixed-proportions utility function, you cannot solve for utility-maximizing decisions by using calculus.

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 09:50
phillips, inc. had the following financial data for the year ended december 31, 2019. cash $ 41,000 cash equivalents 75,000 long term investments 59,000 total current liabilities 149,000 what is the cash ratio as of december 31, 2019, for phillips, inc.? (round your answer to two decimal places.)
Answers: 3
question
Business, 22.06.2019 12:50
Explain whether each of the following events increases or decreases the money supply. a. the fed buys bonds in open-market operations. b. the fed reduces the reserve requirement. c. the fed increases the interest rate it pays on reserves. d. citibank repays a loan it had previously taken from the fed. e. after a rash of pickpocketing, people decide to hold less currency. f. fearful of bank runs, bankers decide to hold more excess reserves. g. the fomc increases its target for the federal funds rate.
Answers: 3
question
Business, 22.06.2019 18:00
1. what is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually? $8.00 $4.08 $8.16 $4.00 2. what is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually? $24.00 $8.00 $16.64 $25.97 3. a business just took out a loan for $100,000 at 10% interest. if the business pays the loan off in three months, how much did the business pay in interest? $2,500.00 $10.00 $250.00 $10,000.00 4. what is the annual percentage yield (apy) for a deposit paying 5 percent interest with monthly compounding? 5.00% 5.12% 79.59% 0.42%
Answers: 1
question
Business, 22.06.2019 20:10
Suppose the production function in an economy is y = k0.5l0.5, where k is the amount of capital and l is the amount of labor. the economy begins with 64 units of capital and 16 units of labor. use a calculator and equations in the chapter to find a numerical answer to each of the following questions. what are the wage and the rental price of capital? the wage is equal to unit(s) of output and the rental price of capital is equal to unit(s) of output.
Answers: 1
You know the right answer?
Mr. A derives utility from martinis (m) in proportion to the number he drinks: U(m) = m. Mr. A is ve...
Questions
question
Mathematics, 11.11.2020 02:00
question
Arts, 11.11.2020 02:00
question
Arts, 11.11.2020 02:00
question
Mathematics, 11.11.2020 02:00
question
Chemistry, 11.11.2020 02:00