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What is the seller's expected profit when r=0. What value for r is optimal for the seller, and what then is the seller's expected profit.
Is she buying the utility-maximizing combination of bread and milk. if not how should she reallocate her expenditures between the two goods.
Why is water, which is so useful and so necessary, so cheap, when diamonds, which are so relatively unnecessary, are so expensive?" In modern economic terms, explain the water/diamond paradox. &nb
The agent has the von Neumann-Morgenstern utility function, u=lnx, where x is wealth. How much insurance should the agent buy. Show that a risk averse agent offered terms worse than actuarially fair w
Explain what it means that the preference relation has a utility function representation, and define the notion of a von Neumann-Morgenstern utility function.
Suppose p=15. What is the individual's optimal level consumption. What is his level of net satisfaction from this good.
What is the diminishing marginal concept. Is there a parallel between diminishing marginal utility in consumption and diminishing returns in production. Describe any similarities you see.
Why is it important that m>p1b. What is the interpretation of the coefficient b. Do the demand functions satisfy the relevant homogeneity conditions. Derive the indirect utility function v(p,w).
At what level of initial wealth will he be indifferent between taking on the risk of getting no income and buying the insurance that removes the risk.
axes are often used as a means of distributing income. What kind of tax system would you favor (regressive, flat, progressive).
how can rational thinking explain the above behaviors. How do your thoughts impact, if at all, your opinion of the theory.
With T on the vertical axis and B on the Horizantal axis, graph Sam's indifference curve for U = 4. Determine the values of B and T that maximize Sam's utility.
Which political philosophy would you support. Why. How would you address the criticisms of your preferred philosophy. Be sure to support you answer with the appropriate references.
How would you respond to this question. How might the bank tie in the concept of utility maximization into the campaign.
The manager receives compensation C equal to 82 plus a portion x of any profit in excess of 1,400. What is the value of x that will make the manager indifferent between shirking and working hard.
Explain the relationship between the ratio of marginal utility and the price of each good consumed in consumer equilibrium.
Income & Substitution Effects of Pepsi and Coca-Cola Pricing. What would be the consumer buying response to Coca-Cola if the price of Pepsi doubled.
The last bottle of wine added 50 units to Bridget's utility, while the last pound of cheese added 40 units. Is Bridget making the utility-maximizing choice. Why or why not.
At an interest rate of 8% per year, what is the equivalent annual worth (years 1-8) of the projected savings.
Suppose Joe must pay a premium of $1,500 for health insurance coverage with ACME insurance. Would he buy the health insurance.
explain how the principle of the diminishing marginal utility is related to drinking each glass of water. Explain the relationship between the ratio of marginal utility and the price of each good cons
Using the economists' model of individual choice comparing the marginal costs. Explain your motivation for four personal decisions you have made in the past year.
That is, if you scale up each price and nominal income in the same positive proportion t, indirect utility remains unchanged. demonstrate this property with the Cobb-Douglas individual.
You did such a great job in the 4th grade class last week that you have been invited back to explain diminishing marginal utility. Explain the concept in everyday language (not the textbook languag
The last bottle of wine added 50 units to Bridget's utility, while the last pound of cheese added 40 units.what should she do instead.