Politician promises a program

Assignment Help Business Economics
Reference no: EM137236

An economy has a total amount of 100 units of a good to allocate between two persons-Amanda and Britney. Amanda's utility level is given by UA = QA, where QA is the number of units she consumes of the good. On the other hand Britney's utility level is given by the function UB = 10V QB where QB is the number of units of the good she consumes.
a) If all of the society's resources are used to make Britney happy, what are the utility levels for Amanda and Britney? If, instead, all the units are used to make Amanda, what are the utility levels for each one of them?
b) Derive the equation for the utilities possibility curve for this two man economy. That is, derive an equation that expresses Britney's utility as a function (measured on the vertical axis) of Amanda's utility measured on the horizontal axis. Including end points plot several points on the graph.
c) Suppose a politician promises a program that will give Amanda and Britney 70 units of utility for each. Should they believe this promise? Why?
d) Suppose resources in the economy are distributed so that Amanda has a utility level of 64 units and Britney has utility level of 50 units. Is this distribution of utility (Pareto Optimal) efficient? If not, why?

Reference no: EM137236

Questions Cloud

What is responsible for raising jims heart rate : Rabbits heterozygous for Pelger trait and exhibiting that phenotype are crossed. The offspring appear in a 2:1 ratio (Pelger : normal). Explain this strange ratio.
The chromosomes of many of cells are plainly visible : Imagine looking during a microscope at a squashed onion root tip. The chromosomes of many of cells are plainly visible. In some cells, replicated chromosomes are aligned along center (equator) of the cell. These particular cells are in which stage of..
How various molecules of glucose : Which extinct species should be the best candidate to serve as the out-group for clade whose common ancestor occurs at position 2.
Why is it significant for clinical laboratory personnel : Why is it significant for clinical laboratory personnel to follow proper methods of sterilization and specimen control.
Politician promises a program : Suppose a politician promises a program that will give Amanda and Britney 70 units of utility for each.
Advantages and disadvantages of a company : Advantages and disadvantages of a company using price discrimination in order to increase demand for its product or service.
Cross elasticity theory : Explain how is the cross elasticity theory used to empirically define economic markets.
Law of demand : Do these public goods conform to the law of demand. For which public supplies is demand price elastic.
Perfectly competitive market : Is the price mechanism of a perfectly competitive market a good mechanism to allocate gasoline.

Reviews

Write a Review

Business Economics Questions & Answers

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Endogenous growth model

Assume an endogenous growth model with labour augmenting technology.

  Achieve economic efficiency

What is output that should be produced to achieve economic efficiency and the value to society for correcting the externality.

  Reserve requirements of top commercial banks

The People's Bank of China, the country's central bank, raised the reserve requirements of its top commercial banks to put a squeeze on the credit market

  Price of elasticity of supply

Tthe price of elasticity of supply is of apartment is 0.50 use the demand and supply curve to show the initial equilibrium point a.

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Probability of returns

If the returns of the risky portfolio are normally distributed, what is the probability of returns being less than 29%.

  Trade and production

Economists argue that the move from barter to money increased trade and production. How is this possible.

  Relationship between the farms output and total costs

Assume that during the last month of the tenth year of ownership, the property in Problem 2 is sold for 1,500,000. Assume also that the seller incurs transaction costs equalling 6 % of the sales price.

  Organ procurement system

The overall effectiveness of the organ procurement system in the United States. What are its strengths and weaknesses.

  Farming production function

Assuming that land and labour are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners in Texas.

  Taxable income report on tax return

Based on the IRS actuarial table, Mario has a life expectancy of 20 years. If Mario receives 12 monthly payments of $1000 the first year, how much taxable income must he report on his tax return.

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