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Show the optimal consumption levels are given by: c1(p,m)= m/1+p^2, c2(p,m)= p^2m/1+p^2
What is the diminishing marginal concept? Is there a parallel between diminishing marginal utility in consumption and diminishing returns in production?
Suppose P=55. What is the individual's optimal level consumption? What is his level of net satisfaction from this good?
What is the probability that at the end of the four exchanges all the balls will be in the jar where they started?
Show that the probability that the last ball is white is the same as the probability that the first ball is white, i.e. , it is m/(m + n).
Using other sources of literature, locate an article concerning trends in consumption patterns. Prepare a 1,050-1,400-word paper in which you:
Mary is consuming 3 hot dogs and 2 Cokes at the Bucs game. The marginal utility of third hot dog is 60 utils and marginal utility of second Coke is 180 utils.
The first player to remove a white ball wins. Develop a recursive formula that allows the convenient computation of probability that the starting player wins.
Explain what it means that the preference relation has a utility function representation, and define the notion of a von Neumann-Morgenstern utility function.
The agent has the von Neumann-Morgenstern utility function, u=lnx, where x is wealth. How much insurance should the agent buy?
Find the probability that Boris wins the match for each of the Play bold in both games 1 and 2 and Play timid in both games 1 and 2.
Early Classical economists found the following "diamond/water" paradox perplexing: "Why is water, which is so useful and so necessary
What are the tradeoffs of preserving some programs while protecting others?
If one of the four is defective, the batch is rejected. What is the probability that the batch is accepted if it contains five defectives?
The quantity offered for sale rises from 400,000 to 600,000. What is the price elasticity of supply?
We are given three coins: one has heads in both faces, the second has tails in both faces. What is the probability that the opposite face is tails?
A coin is tossed twice. Alice claims that the event of two heads is at least as likely if we know. How can we generalize Alice's reasoning?
a. What is the marginal utility of each pizza? b. What causes the marginal utility to diminish?
At an interest rate of 8% per year, what is the equivalent annual worth (years 1-8) of the projected savings?
Question: Explain the difference between utility maximization from the consumption of a free good versus a good that is not free.
Q1. Is Bridget making the utility-maximizing choice? Why or why not? Q2. If not, what should she do instead? Why?
What is the optimal amounts of X and Y each will purchase?
Bond A has coupon interest rate of 6% paid annually. Bond B has a coupon interest rate of 14% paid annually. A. Calculate the selling price for each bonds.
Problem 1: What would be the consumer buying response to Coca-Cola if the price of Pepsi doubled?
A. Plot the total utility curve B. Plot marginal utility directly below total utility