Utility maximization and optimal allocation of resources

Assignment Help Business Economics
Reference no: EM13984109

Derive the Pareto Optimal Conditions in a perfectly competitive world of two individuals(A and B), two goods (X and Y), and two inputs (L and K): (a) Utility Maximization, (b) Optimal Allocation of Resources, (c) Economy as a whole.

Reference no: EM13984109

Questions Cloud

Currently has a monopoly on widgets : Suppose Sammie Wall currently has a monopoly on widgets. The inverse demand function for the only customer interested in widgets is [P=40-6Q] and the cost to produced widgets can be described by the following cost function: [C=10+2Q^2] . If Sammie de..
Compared to the natural rate of unemployment : What does the economy look like when the economy is in an unemployment gap? What type of unemployment rate is it compared to the Natural Rate of unemployment? What about inflation?
Charge for a membership in order to maximize profits : Suppose Sammie Wall currently has a monopoly on widgets. The inverse demand function for the only customer interested in widgets is [P=40-6Q] and the cost to produced widgets can be described by the following cost function: [C=10+2Q^2] . If Sammie de..
Resulting price that consumers face with the corrective tax : The aluminum industry faces a private marginal cost curve PMC = 2Q and a market inverse-demand curve of PD = 60 – QD. However, production creates an externality with marginal damages of MD = Q. What is the resulting price that consumers face with the..
Utility maximization and optimal allocation of resources : Derive the Pareto Optimal Conditions in a perfectly competitive world of two individuals(A and B), two goods (X and Y), and two inputs (L and K): (a) Utility Maximization, (b) Optimal Allocation of Resources, (c) Economy as a whole.
The domestic central bank decreases the money supply : Explain the international interest parity concept. Then explain in words what happens to the IS and LM curves and the nominal interest rate in the domestic economy, and then its impact on the exchange rate between the domestic economy and the rest of..
Policies break with previous economic approaches : Describe the central philosophical assumptions behind Reaganomics. What were the key policies by which it was implemented? To what extent were these policies a break with previous economic approaches?
The ordering cost be by ordering at the EOQ level : A produce distributor uses 1,200 packing crates a month, and each crate is purchased at a cost of $16. The manager has assigned an annual carrying cost of 20 percent of the purchase price per crate. What would the net change (with its direction) in t..
Cost minimizing firms production function : A cost minimizing firm's production function is given by q=lk, where MPl=k and mpk=l. the price of labor services is w and the price of capital services is r. suppose you know that when w=$4 and r=$2, the firms total cost is $160. what would the cost..

Reviews

Write a Review

Business Economics Questions & Answers

  Monopolists can set price-output since they are producer

Explain this statement: “Monopolists can set price and output since they are the only producer, but this does not necessarily guarantee they will make a profit.”

  Assume investment is low risk-no riskier than putting momey

How much are you willing to invest today to receive $150 a year for seven years and an additional $1,200 at the end of the seventh year? Assume this investment is low risk, that is, no riskier than putting money in a bank earning 2%.

  Demand for the three popular game consoles

Think about the demand for the three popular game consoles: XBox, PS3, and Wii. In each of the scenarios below, briefly describe the effect on (a) the demand for XBox games and (b) the quantity of XBox games demanded

  The rate of inflation is expected to increase

In some country, the rate of inflation is expected to increase from 2 percent to 5 percent and people fear that the increase will be permanent if the central bank does not take action. In both diagram and text, indicate clearly whether you deal with ..

  Does this mean that the average american is twice as well

It is $16 trillion today. Does this mean that the average American is twice as well off today than in 1996? Why or why not?

  Find out the equation for the linear supply curve

Find out the equation for the linear supply curve which fits this information. What would the new equilibrium price and quantity be if supply were to increase by 20%.

  The classic example of opportunity cost

The classic example of opportunity cost is the costs of going to college. Illustrate the implicit opportunity cost of foregone income as well as tuition, books, etc. Think about whether room and board should be considered a cost of college. Calculate..

  Making regulated monopolies adopt marginal cost pricing

An argument for making regulated monopolies adopt marginal cost pricing is that this would:

  For retirement planning-compounded monthly

For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annually, compounded monthly?

  Compute marginal cost and average cost

Assume the hospital is a monopolist with a demand function given by p = 404−2x, where p is the price of hospital care and x is the quantity of hospital care. Assume that the hospital’s cost function is given by C = 300+4x+8x 2 , where C is total cost..

  Explain which fiscal and monetary policies might activist

Explain which fiscal and monetary policies might "activist" Keynesian economists recommend to help a depressed economy regain full employment.

  Profit maximizing quantity and maximum profit

Mr Patel runs a motel in Tampa, FL. The market is highly competitive since there are many hotels in the surrounding areas and the average room rent per night is $35. There are 30 rooms are Mr Patels motel and each room can be rented for 30 nights a m..

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