User Account

All Pages

Illustrate matt utility maximizing choices

Assignment Help Business Economics
Reference no: EM131908991

Matt's utility function is U(x1, x2)=min{3x1, 2x2} The price of each good is $1 and Matt's monthly income is $2500. Matt lives in SanDiego, but his firm wants him to relocate to Portland. In Portland, p1= $0.50 while the price of p2 and I remain the same.  

A.  Carefully illustrate Matt's utility maximizing choices of x1 and x2 and maximum utility in both San Diego and in Portland. 

B. Clearly Matt will be better off with the relocation. What is his compensating variation (CV) for the move to Portland? Define compensating variation, illustrate on your graph above, and provide a specific dollar amount for Matt's compensating variation for the move to Portland.

Reference no: EM131908991

Questions Cloud

How much money you can spend on capital replacements : As a healthcare administrator, how will you determine how much money you can spend on capital replacements and upgrades in a particular year?
If your tax rate was 25 which bond would you invest in : Suppose you have two investment options: a corporate bond with a 7% annual coupon payment or a municipal bond with a 6% annual coupon payment.
What economic theories are most useful : What economic theories are most useful when applied to the healthcare industry and why?
What might you do to enhance or abate the effect : How has the education pendulum most significantly affected the general morale of educators? As an educational leader, what might you do to enhance or abate.
Illustrate matt utility maximizing choices : Carefully illustrate Matt's utility maximizing choices of x1 and x2 and maximum utility in both San Diego and in Portland.
Draw scott budget constraint : a. Draw Scott's budget constraint, labeling all the relevant points. b. What is the opportunity cost of a pair of shoes?
Create a flowchart outlining the process you would take : Create a flowchart outlining the process you would take from determining the problem to finding a solution.
How can a us investor undertake uncovered interest arbitrage : How can the US investor undertake covered interest arbitrage if the pound is at a 3-month forward discount of 1% (per year)?
Difference between the business cycle and economic growth : Explain the difference between the business cycle and economic growth.

Reviews

Write a Review

Business Economics Questions & Answers

  Elasticity of demand at the current price level

a. What is the elasticity of demand at the current price level? b. Is the current price level profit-maximizing?

  What is the npv of project

What is the NPV of this project? Should you buy the oven? Assume 10% interest rate.

  What is the difference between the fed and the treasury

What is the structure of the Fed? What is the difference between the Fed and the Treasury? What are the goals of the Fed? What actions are at the disposal of the Fed?

  Company use of information sources assignment

Submit Coca-Cola Company Use of Information Sources assignment. The current business environment provides a plethora of information resources that are essential for companies to develop to understand and reach their customers.

  All investment must be financed with consumer saving

Suppose that every additional 3 percentage points in the investment (I / GDP) booat GDP growth by 1 percentage point. Assume also that all investment must be financed with consumer saving. The economy is now characterized by

  Expansionary fiscal policy by increasing government purchase

Assume the Qatari government is pursuing an expansionary fiscal policy by increasing government purchases. Show the short run and long run impact of this policy on the macroeconomic equilibrium point using AD and AS model (assume that Qatar’s economy..

  Separating the interest and the principal amounts

How much of the mortgage will still be owed after the payment due on August 31, 2018, has been made?

  To achieve gains from specialization

To achieve gains from specialization: a. country A should export rubber bands to country B and import country B’s paper clips. b. country A should export paper clips to country B and import country B’s rubber bands. c. country A should produce both r..

  Suppose a worker is offered a wage of 5 per hour plus a

suppose a worker is offered a wage of 5 per hour plus a fixed payment of 40. what is the equation for the worker

  Software firm on developing appropriate disclosure policies

You are advising a software firm on developing appropriate disclosure policies. You spend some time analyzing the past data that the firm has made available to you and come up with the following numbers for a typical software product.

  Sell their output in imperfectly competitive markets

In certain industries, firms buy their most important inputs in markets that are close to perfectly competitive and sell their output in imperfectly competitive markets. Cite as many examples as you can of these types of businesses.

  Competition is diminished by consolidating two firms

The US Federal Trade Commission justifies their record of approval of most mergers by asserting that even though competition is diminished by consolidating two firms into one, mergers actually benefit

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