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a consumer has a utility function u(x1,x2) =max{x1,x2} what is the consumer's demand function for good 1?
If you work as an advisor for firm A (Good X) and firm B (Good Y), when the income of consumer increase during the economic boom, what is the best advice you should give to the firm owner for good X and good Y as to what to do with the volume of production - should the firm raise their volume even more or just a little? Why
Cross-price elasticity between UAV cameras and drones is negative 2.5 when the price of drones drops. Explain what this means in terms of the relationship between the two products. The forecast is that the price of drones will keep dropping - what advice would you have for the UAV camera maker? Why?
The owner of the firm wants to maximize revenue for each product, so she asks Kai to calculate the value of elasticity and he (Kai) asks you (ace economics student) to calculate price elasticity of demand for both products and advice Kai which price to charge based upon your economics knowledge!
P1 = 32 − 2Q1
P2 = 22 − 0.5Q2
Pete enjoys rock concerts and the opera. The table shows the utility he gets from each activity: Concerts Utility from Utility from per month rock concerts operas 1 120 200 2 100 160 3 80 120 4 60 80 5 40 40 6 20 0 Pete has a200 a month to spend on concerts. A rock concert ticket is a20, and an opera ticket is a40. How many rock concerts and how many operas does Pete attend?
Max enjoys windsurfing and snorkelling. He obtains the following utility from each of these sports: Hours Utility from Utility from per day windsurfing snorkelling 1 120 40 2 220 76 3 300 106 4 360 128 5 400 140 6 412 150 7 422 158 Max has a35 to spend and he can spend as much time as he likes on his leisure pursuits. Windsurfing equipment rents for a10 an hour, and snorkelling equipment rents for a5 an hour. a Draw a graph that shows Max’s budget line. b How long does he spend windsurfing and how long does he spend snorkelling?
Jason enjoys rock CDs and spy novels and spends a60 a month on them. The following table shows the utility he gets from each good: Quantity Utility from Utility from per month rock CDs spy novels 1 60 20 2 110 38 3 150 53 4 180 64 5 200 70 6 206 75 a Draw graphs showing Jason’s utility from rock CDs and from spy novels. b Compare the two utility graphs. Can you say anything about Jason’s preferences?
Lee’s and Lou’s demand schedules for CDs are: Quantity demanded by Price Lee Lou (euros per CD) (CDs per year) 6 12 10 8 98 10 6 6 12 3 4 14 0 2 If Lee and Lou are the only two individuals, what is the market demand for CDs?
Max takes a Club Med vacation, the cost of which includes unlimited sports activities. There is no extra charge for equipment. If Max windsurfs and snorkels for 6 hours a day, how many hours does he windsurf and how many hours does he snorkel?
