Problem on income probability

Kramer spends all of his income  $270  on two products, soup (S) and on golf balls (G). He always bought 2 golf balls for every 1 cup of soup he consumes. He acquires no additional utility from the other cup of soup unless he as well gets 2 more golf balls and he gets no additional utility from the other golf ball unless he as well gets another 1/2 cup of soup.

a. To Kramer, soup and golf balls are (circle 1):

Perfect Substitutes         Perfect Complements         Neither

b. Assume the price of soup is $5 per cup and the price of golf balls is $2 per ball.  Clearly indicate Kramer’s utility maximizing bundle of soup and golf balls on the graph.  Determine How many cups of soup and how many number of golf balls does he consume?

Quantity of soup = _________    Quantity of golf balls = __________

   Related Questions in Advanced Statistics

  • Q : Error probability As of last year, only

    As of last year, only 20% of the employees in an organization used public transportation to commute to and from work. To determine if a recent campaign encouraging the use of public transportation has been effective, a random sample of 25 employees is to be interviewe

  • Q : Problem on consumers marginal utility

    Consider a consumer with probability p of becoming sick.  Let Is be the consumer’s income if he becomes sick, and let Ins be his income if he does not become sick, with Is < Ins.

    Suppo

  • Q : Problem on Chebyshevs theorem 1. Prove

    1. Prove that the law of iterated expectations for continuous random variables.

    2. Prove that the bounds in Chebyshev's theorem cannot be improved upon. I.e., provide a distribution which satisfies the bounds exactly for k ≥1, show that it satisfies the

  • Q : How you would use randomization in

    The design of instrument controls affects how easily people can use them. An investigator used 25 students who were right-handed to determine whether right-handed subjects preferred right-handed threaded knobs. He had two machines that differed only in that one had a

  • Q : Non-parametric test what is the

    what is the appropriate non-parametric counterpart for the independent sample t test?

  • Q : What is your statistical decision

    Question 1

    Do parents with more children travel more than parents of small families? To find out, a survey was done of a large number of adults. Respondents were asked how many children they had and how many times

  • Q : Find the cumulative distribution

    You must use the pre-formatted cover sheet when you hand in the assignment.

    Out full detailed solutions. Sloppy work will naturally receive a lower score.

    1. Suppose at each step, a particle moving on sites labelled by integer has three choices: move one site to the right with pro

  • Q : True and False Statement Discuss the

    Discuss the following statements and explain why they are true or false:

    a)      Increasing the number of predictor variables will never decrease the R2

    b)      Multicollinearity affects the int

  • Q : Components of time series Name and

    Name and elaborate the four components of time series in brief.

  • Q : Probability of winning game Monte Carlo

    Monte Carlo Simulation for Determining Probabilities 1. Determining the probability of winning at the game of craps is difficult to solve analytically. We will assume you are playing the `Pass Line.'  So here is how the game is played: The shooter rolls a pair of

2015 ©TutorsGlobe All rights reserved. TutorsGlobe Rated 4.8/5 based on 34139 reviews.