You are the manager of a firm and you are required to optimize the Cobb-Douglas function given the following parameters. The maximum amount of money available to spend is $340 where the price of K 8 and P = 4. The function is given as = = 8 and the price of L= 4. That is P = K 0.4 L0.6 q= What is the Lagrangian?
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- Differentiate the profit function with respect to ?1 ??? ?2.Explain intuitively why we take the derivative of the function.What shifts on the graph provided? 1st Blank options are fall or rise 2nd Blank options are a decrease or an increaseMiles is an engineering student who uses al his income to buy instant coffee and food. Miles's utility function for instant coffee (X) and food consumption (Y) is given by U (x, y) = x^0.2y^0.8. If Miles's income is $10 and the price of instant coffee and food are $1 and $2 respectively, a) Explain what is the optimal consumption bundle for instant coffee and food as well as Miles's total utility level from that bundle! b) If due to failure harvest of coffee crops, the price of coffee increases to $2, find the new optimal consumption bundle for instant coffee and food as well as Miles's total utility level from that bundle! c) Illustrate in 1 diagram, the situation in point a & b
- Define the followingIf the supply and demand functions for a commodity are 100 + 2(4+ Pa = - (Q.) P₁ = (Q + 2)² E plot each function on the same graph Estimate the quarum price and quarty aigebraicaty and graphicaly w▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪ ‒‒‒‒‒‒‒‒‒‒‒‒wwwwwwwwwElsa lives alone on an island with two goods, bananas and fresh water. Her utility function is U = 4BW where B is the amount of bananas she consumes and Wthe amount of water. Her production function for bananas is B=Lg where Lg is the amount of labour time she devotes to bananas. Her production function for water is W = Lwwhere Lwis the amount of labour time she devotes to water. If the total time she has available is 70, what should she do to maximize her utility? (Enter your answers in whole numbers.) LB= Lw=[
- 18....E D C B In the graph above, the shift from curve 'B' to curve 'C' can be attributed to the- O Rising cost of raw materials O Price of a complimentary good decreasing O break-through of new technology O decline in average annual incomeBriefly explain and graphically illustrate the property of diminishing margincal rate of substitution and its relation to marginal utilities.
- Define the following words(I am trying to find the simplest way to solve the question if Im using a cas calculator) (Formulas and notes I can put on my calculator are helpful) An apple grower finds that if he plants 80 trees per acre, each tree will yield 26 bushels of fruit. He estimates that for each additional tree planted per acre, the yield of each tree will decrease by 4 bushels. Given a price of $1.00 per bushel, find the maximum revenue and how many trees should he plant per acre to maximize her harvest? 36 trees per acre, maximum revenue of $7,480 37 trees per acre, maximum revenue of $7,482 43 trees per acre, maximum revenue of $7,482 44 trees per acre, maximum revenue of $7,480Consider Justin who makes $1,400 per week and just won a ‘set for life’ lottery ticket whichinvolves a fortnightly payment of $10,000 for 20 years. Currently he works 35 hours per week. Nowdo the following: • Illustrate the effect of the lottery win on Justins budget constraint using a fully labelleddiagram where i) the horizontal axis represents the hours of free time per week, and ii) thevertical axis represents Justins weekly consumption. • Illustrate on the same diagram Justins optimal decisions before and after the lottery winalong with his indifference curves. • Based on your diagram, discuss whether Justin will quit his job.