Business, 07.07.2021 02:20 lydiapoetz5330

Consider two individuals A and B, both of whom have preferences defined over two goods x and y: U(x, y) = -1/2(1-x)^2 - 1/2 (1-y)^2

Assume that Px = Py = 1.

a. Suppose that individual A has an income of $2 and individual B has an income of $0.50. Set up and solve both (UMP]s. What is each individual's optimal consumption bundle?
b. Compare the marginal utilities of each good between individuals A and B at the optimal bundle. Is either individual satiated? What implications does this have for their marginal utilities of income? Explain.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 21:30

You invest all the money you earned during your summer sales job (a total of $45,000) into the stock of a company that produces fat and carb-free cheetos. the company stock is expected to earn a 14% annual return; however, 5 years later it is only worth $20,000. turns out there wasn't as much demand for fat and carb-free cheetos as you had hoped. what is the annual rate of return on your investment?

Answers: 1

Answer

Business, 22.06.2019 08:30

What is the key to success in integrating both lethal and nonlethal activities during planning? including stakeholders once a comprehensive operational approach has been determined knowing the commander's decision making processes and "touch points" including stakeholders from the very beginning of the design and planning process including the liaison officers (lnos) in all the decision points?

Answers: 1

Answer

Business, 22.06.2019 16:00

In a perfectly competitive market, the long-run market supply curve tends to be horizontal or nearly so. what is another way to state this fact? (a) market supply is much more elastic in the long run than the short run. (b) in the long run, average total cost is minimized. (c) in the long run, price equals marginal cost. (d) market supply is much less elastic in the long run than the short run.

Answers: 1

Answer

Business, 22.06.2019 17:50

Which of the following statements is true of unsought products? as compared to convenience products, unsought products are purchased more frequently. unsought products are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort. a life insurance policy is an example of an unsought product. unsought products have strong brand identification for which a significant group of buyers is willing to make a special purchase effort. unsought products are those products purchased for further processing or for use in conducting a business.

Answers: 2

Answer

You know the right answer?

Consider two individuals A and B, both of whom have preferences defined over two goods x and y: U(x...

Questions