Business, 12.02.2020 00:03 Bellzers8328
Two consumers, 1 and 2, constitute a small part of the overall economy. The consumers have preferences over the consumption of two traded goods and also over some action taken by consumer 1. Let xi (resp. yi) represent the quantity of the first (resp. second) good consumed by agent i, and let a ≥ 0 be the action taken by consumer 1. Let ui(xi , yi , a) denote consumer i’s utility function, and suppose that u1(x1, y1, a) = x1+ln y1+2a−a 2 and u2(x2, y2, a) = x2+ln y2− a 2 2 + a . The prices of good 1 and 2 are px = 1 and py = 1 2 respectively, and consumer i’s income is wi = 10. (a) Solve for consumer 1’s utility maximizing action and commodity bundle. Solve for consumer 2’s utility maximizing commodity bundle. (b) Show that the allocation found in (a) is inefficient, i. e., that there are alternative allocations that improve at least one consumer’s well being without making anyone else worse off. (c) Find the optimal level of a. (d) Suppose that consumer 1 is made to pay a tax of t per unit of a. Is there a value of t that implements the optimal level of the externality a? (e) Suppose that the government subsidizes the reduction of a as follows: it gives consumer 1 a subsidy of $s for every one unit decrease in a. Is there a value of s that implements the optimal level of the externality a? (f) Suppose that the government assigns the right to an externality-free environment to consumer 2. That is, consumer 1 cannot engage in
Answers: 2
Business, 21.06.2019 22:10, jaxonsensintaff
Arival company manufactures fuel tanks for cars using a different production technique. the total weekly cost (in dollars) of producing x tanks is given by c(x) = 10000 +90x - 0.04x2 find the marginal cost at a production level of 500 fuel tanks per week to approximate the cost of the 501st unit (round to the nearest 2 decimal places, if needed)
Answers: 3
Business, 23.06.2019 10:20, cheesecake1919
Teatro restoration, inc., begins renovating an old theater for urban edge productions, but after three months teatro demands an extra $250,000. urban edge agrees to pay. refer to fact pattern 13–4. if teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add considerable cost to the project, the agreement is
Answers: 3
Business, 24.06.2019 01:00, brebun4742
Asample of n = 10 automobiles was selected, and each was subjected to a 5-mph crash test. denoting a car with no visible damage by s (for success) and a car with such damage by f, results were as follows:
Answers: 3
Two consumers, 1 and 2, constitute a small part of the overall economy. The consumers have preferenc...
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Business, 21.09.2020 23:01