User Account

All Pages

Expression for sally''s marginal rate of substitution

Assignment Help Business Management
Reference no: EM131617688

Suppose that Sally's preferences over baskets containing coffee (good x), and milk (good y), are described by the utility function U(x,y) = 40√x+y. Sally's corresponding marginal utilities are, MUx=20/√x and MUy=1. ? ? The price of coffee is Px = $4 per cup, and the price of milk is Py = $1 per litre. Sally's income is I = $200.

Question 1: Without deriving the optimal consumption basket, show that the basket with x = 25 cups of coffee, and y = 50 litres of milk, is NOT optimal.

Question 2: Derive the expression for Sally's marginal rate of substitution.

Question 3: Find Sally's optimal consumption basket.

Question 4: Find Sally's new optimal consumption basket if the price of coffee increases to Px = $5 per cup.

Question 5: Is coffee a Giffen good for Sally? Briefly explain. Your answer must reference the consumption baskets you found in questions 3 and 4.

Question 6: Find the income and substitution effects associated with an increase in the price of coffee from $4 to $5 a cup.

Question 7: Describe the relationship between Sally's demand for coffee and her income. Your answers must reference the your previous answers, AND use the correct term to describe the relationship.

Reference no: EM131617688

Questions Cloud

Why you think so many innovation projects fail : Explain why you think so many innovation projects fail to generate an economic return - what would you do differently for the examples you have given?
Discuss how garys environment has influenced behavior : Discuss how Gary's environment has influenced his behavior and decision-making during his adolescence.
Compare the terms ssd and nvme : Compare contrast the following technology/terms. Describe what each is used for. Give specifications and technology of each and how they are used.
Should intervention be at a state level or a federal level : Should this intervention be at a state level or a federal level? Why? Provide at least two examples of when the government should become involved.
Expression for sally''s marginal rate of substitution : Without deriving the optimal consumption basket, show that the basket with x = 25 cups of coffee, and y = 50 litres of milk, is NOT optimal.
Develop specific assertions related to securities : Financial Assertions and Audit Objectives. You are engaged to examine the financial statements of Spillane Company for the year ended December 31.
Provide a rationale for the stock : Your investment should align with your client's investment goals - Provide a rationale for the stock
Ineffective under a fixed exchange rate : Monetary policy is ineffective under a fixed exchange rate but effective under a floating rate explain with graphs and symbols.
Discuss any limitations or gaps in existing research : Explain the relevant theories and empirical studies that have led to the student's professional recommendation

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd