Market price of the marijuana

Assignment Help Microeconomics
Reference no: EM132526549

Ken Erdedy owns 14 units of marijuana. He both consumes it and sells it; and the latter activity is his only source of income. His utility function is U(x,y) = x^4 * y^1, where x denotes the units of marijuana he consumes and y denotes the composite good, i.e. the dollars he spends on everything else. The market price of the marijuana changed recently from 15 to 19. What is the wealth effect of this price change (using Hicksian decomposition) on marijuana?

Reference no: EM132526549

Questions Cloud

Are coach preferences complete-transitive and reflexive : Are coach's preferences complete, transitive and reflexive? Please explain.
Does coach steroid have transitive preferences : Jerry Jacuzzi weighs 150 pounds, runs at average speed, and is extremely obedient. Does Coach Steroid have transitive preferences? How?
Management of the pool complex : Paul works at the UQ Swimming Pool Complex in the cafe. Management of the Pool Complex has a policy that all Pool Complex staff must be trained in CPR
Rent control is an example of a price ceiling : Explain, using supply and demand analysis, the effects on the apartment rental market of imposing rent control. Why would a government institute rent control
Market price of the marijuana : The market price of the marijuana changed recently from 15 to 19. What is the wealth effect of this price change (using Hicksian decomposition) on marijuana?
How would a low-cost price leader enforce its leadership : How would a low-cost price leader enforce its leadership through implied threats to a rival?
Consider the market of basic agricultural products in japan : Consider the market of basic agricultural products in Japan, which market structure can you approximately associate it with?
Market structure of the electronic business : Consider the market structure of the electronic business in Bangladesh, what type of market structure can this be characterized as?
Considering the current covid 19 situation : Considering the current covid 19 situation and only local disinfectant sprays, under which market structure does pharmacies fall under?

Reviews

Write a Review

Microeconomics Questions & Answers

  Consider a constant cost perfectly competitive industry

Consider a constant cost perfectly competitive industry which is initially in long-run equilibrium under current demand conditions. Assume that the number of firms in the industry is fixed at its current level ie: the number of firms cannot be change..

  Find the optimal tax rate

Currently the foreign earnings of U.S. multinational companies are taxed only when the income is returned to the United States. Taxes are deferred if the income is reinvested abroad. The department seeks a tax rate that will maximize total tax reve..

  What is meant by constant opportunity costs

What is meant by constant opportunity costs and increasing opportunity costs? Under what conditions will a country experience constant or increasing costs?

  Discuss two fiscal policy options

To slowdown the economy and prevent overheating (inflationary pressure buildup), fiscal and/or monetary policies can be employed. Using Aggregate Demand.

  Where do the two fields aid

Draw a diagram showing two conductors conneting a battery to a load resistance through a closed switch. Show the magnetic field of the current in the negative side of the line and in the positive side.

  What was the economic rationale behind jal hedges

Did JAL's forward contracts constitute an economic hedge? That is, is it likely that JAL's losses on its forward contracts were offset by currency gains on its operations?

  What other dependent variables could be recorded

Comment on the levels of the independent variable that were used. What other dependent variables could be recorded? Comment on the conclusion by the experimenter.

  Explain whether you agree or disagree

The demand for skilled workers in the United States has been increasing. To increase the supply of skilled workers, many argue that immigration reform.

  How do insurance companies try to reduce these problems?

Define asymmetric information. Distinquish between hidden characteristics and hidden actions. Which type of asymmetric information contributes to the principal agent problem?

  Possible production function for bicycles

Let B denote the number of bicycles produced from x_F units of bicycle frames and x_T units of tires. Suppose that every bicycle needs exactly two tires and one frame.

  1 show what happens to producer surplus worker surplus and

1. show what happens to producer surplus worker surplus and the gains from trade as workers migrate from a low- wage to

  Formulate a linear programming model for problem

Use the graphical method to determine how many of each type of boot should be produced and what are the shadow prices of materials and labour?

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!

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