An economy has a total amount of 100 units of a good to

Assignment Help Business Economics

Reference no: EM13353198

An economy has a total amount of 100 units of a good to allocate between two persons-Amanda and Britney. Amanda's utility level is given by UA = QA, where QA is the number of units she consumes of the good. On the other hand Britney's utility level is given by the function UB = 10V QB where QB is the number of units of the good she consumes.
a) If all of the society's resources are used to make Britney happy, what are the utility levels for Amanda and Britney? If, instead, all the units are used to make Amanda, what are the utility levels for each one of them?
b) Derive the equation for the utilities possibility curve for this two man economy. That is, derive an equation that expresses Britney's utility as a function (measured on the vertical axis) of Amanda's utility measured on the horizontal axis. Including end points plot several points on the graph.
c) Suppose a politician promises a program that will give Amanda and Britney 70 units of utility for each. Should they believe this promise? Why?
d) Suppose resources in the economy are distributed so that Amanda has a utility level of 64 units and Britney has utility level of 50 units. Is this distribution of utility (Pareto Optimal) efficient? If not, why?

Reference no: EM13353198

Questions Cloud

Q1 two organisms each with genotypes ttgg mate the : q1. two organisms each with genotypes ttgg mate. the possibility of producing an offspring that has the dominant

Q1 my friend an inventor says that she has just made a : q1. my friend an inventor says that she has just made a translucent light weight metal by combining aluminium with

Q1 how various molecules of glucose c6h2o6 molecular mass : q1. how various molecules of glucose c6h2o6 molecular mass 180 daltons would be present in one litre of a 1m molar

Q1 administration fda is testing the product to see if it : q1. administration fda is testing the product to see if it truly lacks fat. hydrolysis of the cake mix yields glucose

An economy has a total amount of 100 units of a good to : an economy has a total amount of 100 units of a good to allocate between two persons-amanda and britney. amandas

Q1 determine the advantages and disadvantages of a company : q1. determine the advantages and disadvantages of a company using price discrimination in order to increase demand for

Q1 explain why wage rates might rise at joes quik print : q1. explain why wage rates might rise at joes quik print shop. if joe replaces his aging copy machines with state of

In a study available in 1980 b b gibson estimated the : in a study available in 1980 b. b. gibson estimated the subsequent price and income elasticity of demand for six types

Q1 suppose that you can schedule a worker up to four hours : q1. suppose that you can schedule a worker up to four hours per day. the benefit function is given by bh 500h - 22.5h2

User Account

All Pages