Microeconomics Answers

The individual's demand curve for a commodity represents a maximum boundary of the individual's intentions. True or false, explain

The fundamental economic problem that must be solved efficiently is

True or False. The contract curve in the Edgeworth box is the set of all allocations that are Pareto efficient.

True or False. The contract curve in the Edgeworth box is the set of all allocations that are Pareto efficient.

True or False. Consider two firms producing an identical product with marginal costs MC1= 1.98$ & MC2 = 2$ correspondingly. The two firms set their prices simultaneously (Bertrand competition) and the lowest price gets the entire market. If they set the same price they split the market evenly. A set of equilibrium prices is p1 = 2$ and p2 = 2.01$.

Let U(X,Y)=X+ln(Y).  Show the effect of P_y on X (i.e., ∂X/∂P_y) and the effect of P_x on Y (i.e., ∂Y/(∂P_x), where P_x and P_y are prices of X and Y, respectively. Are ∂X/∂P_y and ∂Y/∂P_x the same? Specifically, are X and Y substitutes or complements? Why? 

If your preferences is represented by the utility function U=min[2C, F] where F is her food consumption and C her clothing consumption, and if the price of food (Pf) were 1, and her income was 100, what would be the compensating variation (CV) to a fall in the price of clothing (Pc) from 2 to 1?