Reference no: EM13179343
1. Consider a Cobb-Douglas utiltiy function of the form U (x,y,z) = xyz with three consumer goods, x, y and z:
Set up the Lagrangian maximization problem
Solve for the Marshallian Demand for goods x, y and z respectively
Compute the income effect for good x
Compute the the cross price effect of a price change for good x on consumption of good y
Solve for the indirect utility function
Solve for the optimized Lagrange multiplier, Lambda* , and show that it is equal to the marginal utility of income
2. An economic bad is something you don't want to consume, i.e. less bad is better. Define an economic bad mathematically and name one economic bad in reality. Suppose you had to consume a certain amount of a given economic bad but could pay to get rid of it. What would the Marshallian Demand curve for the economic look like? Draw it in the Price-Quantity axis (hint: be careful to defne the price of economic bad here!).
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Find the velocity of the top of the ladder
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What is the effective interest rate made in investment
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What standard deviation does the filling machine need
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Compute the income effect for good
: An economic bad is something you don't want to consume, i.e. less bad is better. Define an economic bad mathematically and name one economic bad in reality. Suppose you had to consume a certain amount of a given economic bad but could pay to get r..
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Sketch the curve
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What is meant by the terms bonded warehouse
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How far has billy cycled
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Which one is more valuable if the interest rate is 2i
: The Present value of the following 2 cash flows are equivalent if the interest rate is i. Which one is more valuable if the interest rate is 2i? P=F(1+i)^-n Option 1 = 3 periods Option 2 = 2 periods.
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