Does mike have convex preferences for quarters and dimes

Assignment Help Business Economics

Reference no: EM13854083

Mike finds a Coke machine in an abandoned part of town and is extremely thirsty. The Coke machine requires exact change - two quarters and a dime. No other combination of coins will make anything come out of the machine. No stores are open where he can make change. Mike will buy as many soft drinks as he can with whatever change he has; the more soda he can buy, the better. Consider Mike's preferences for quarters and dimes.

1. Draw a graph that illustrates all the combinations of quarters and dimes the Mike will treat as indifferent to having 2 quarters and 1 dime. Then draw another graph illustrating all the combinations of bundles and dimes that mike treats as indifferent to having 4 quarters and 2 dimes.

2. Does Mike have convex preferences for quarters and dimes?

3. Does Mike always prefer more of both kinds of money to less?

4. If Mike where holding 7 quarters and 2 dimes how many dimes would you have to give him to give up one quarter? Explain your reasoning.

5. If Mike where holding 2 quarters and 2 dimes how many dimes would you have to give him to give up one quarter? Explain your reasoning

Reference no: EM13854083

Questions Cloud

Explore early litigation surrounding issue of climate change : The changes occurring in our climate are likely to have a major impact in several areas, including environmental litigation. This reading explores the early litigation surrounding the issue of climate change

Both produce cars and food using labor and capital : Home and Foreign both produce cars and food using labor and capital. In each country, labor and capital are both freely mobile across industries. It takes 5 units of labor and 3 units of capital to produce 1 unit of food, and 4 units of labor and 4 u..

Regulating single monopoly firm-decreasing-cost industry : Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $3 per bag no matter how many bags are produced. You find out that if yo..

Typical plot lines of film noir in sherlock : Write on any 2 elements-Can you see any typical plot lines of film noir in Sherlock Jr, if so which ones he has?

Does mike have convex preferences for quarters and dimes : Mike finds a Coke machine in an abandoned part of town and is extremely thirsty. The Coke machine requires exact change - two quarters and a dime. No other combination of coins will make anything come out of the machine. Draw a graph that illustrates..

Process analysis essay : The Process Analysis Essay requires you to fully describe the process of completing a task. You can call upon your personal experiences with this task but must remain objectives and write your essay from the third person point of view. The essay w..

Production possibilities frontier should reflect the fact : The shape of Canada’s production possibilities frontier (PPF) should reflect the fact that as Canada produces more trucks and fewer cars, the opportunity cost of producing each additional truck ______

Calculate the allocation of outputs across the two periods : Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8-0.4q. Marginal extraction cost = $2. r = 20%. The available supply is 20 units. Calculate the allocation of outputs across the two periods that maximizes the present valu..

Find the corresponding matrix of the digraph : Find the height/level of the tree and how many leaves does the tree have

User Account

All Pages