What is maxs income level and demand function

Assignment Help Econometrics
Reference no: EM13209314

Max has the utility function (x1,x2)=x1(x2+2).

(a) If the price of x1 is 2, the price of x2 is 1, and Max's income is 10, how much x1 will Max consume? How much x2?

(b) Suppose that Max's income level is 10. Derive Max's demand function for x1. Is x2 a substitute of x1 or a complement of it?

Reference no: EM13209314

Questions Cloud

People being placed at the heart of organizing : What happens to ‘people being placed at the heart of organizing’ when organizations become virtual? How does the trend toward wired organizations fit with the Relational Leadership model espoused by Kouzes and Posner,
Describe how to decrease ticket prices : you are part of a local community theater group. it is the goal of the group to increase the amount of revenue earned through ticket sales. Chloe says the obvious answer is to decrease ticket prices. is Chloe correct why
A batch reactor is to be designed for a first order reaction : the required removal or conversion of A is 90%. If the rate constant, K, is 0.35hr-1, what is the required residence time in hours for the batch reactor?
Explained piaget''s-erikso''s theories-stages of development : Explained Piaget's and Erikso's theories about the stages of development. Analyzed and explained the differences and similarities in how they approached social and moral development.
What is maxs income level and demand function : (a) If the price of x1 is 2, the price of x2 is 1, and Max's income is 10, how much x1 will Max consume How much x2 (b) Suppose that Max's income level is 10. Derive Max's demand function for x1. Is x2 a substitute of x1 or a complement of it
Explain salt in the effluent be to reduce the level : A pickle-packing plant produces and discharges a waste brine solution with a salinity of 13,000 mg/L NaCl, at a rate of 400 L/min, discharged into a stream with a flow rate above the discharge of 5 million L/d and a salinity of 20 mg/L
Influence customer expectations and perceptions : How can a project manager influence customer expectations and perceptions?
Determine how much milk will sheila buy per week : Sheila budgets $9 per week for her morning coffee with milk. She likes it only if it is prepared with 4 parts of coffee and 1 part milk. Coffee costs $1 per ounce and milk costs $0.5 per ounce. How much coffee and how much milk will Sheila buy per..
What is the minimum level of the price of x1 compatible : the utility function (x1,x2)= (x1+1)(x2+4). The price of x2 is $1. Lee spends all his income to buy 6 units of x2 and no x1. What is the minimum level of the price of x1 compatible with these facts

Reviews

Write a Review

Econometrics Questions & Answers

  What is the relationship between mr and mc

Create a table that shows Total Revenue, Total Cost and Total Profit, (in your table, let quantity run from 0 to 13 in increments of 1.) Indicate in your table where both total profits and total revenues are maximized Q TR TC Tp

  Should you purchase a new color copier

The markets for labor and office space are tight in your area. To acquire the lease and hire workers, you signed contracts requiring you to give 12 months advance notice before abandoning your lease or laying off workers

  Calculate the cumulative loss of output for years

Natural real GDP grows by 3 percent per year over the next five years, but then grows by 4 percent in the second year, 5.5 percent in the third year, 4.2 percent in the fourth year, and 3.5 percent in the fifth year. Calculate the cumulative loss..

  What is the steady state level of capital per worker

Now, suppose that initially z=2 and the economy is in the steady state you calculated in part a. . Then suppose that z falls to 1.8 permanently. What is the new steady state? Determine capital per worker znd output per worker in each of the first ..

  Calculate the current value of the index

An investor bought a tax-free provincial bond, at a cost of $1000 which will pay $50 interest each year for 20 years. The bond will mature in 20 years and return the original $1000. If there is a 2% annual inflation during this period, what real r..

  How do we go about solving the problem

Sam purchased a machine 4 yrs ago at at cost of $8,000. It has a book value of $2300. It can be sold now for $4,300, or it could be sold for 3 more yrs,at the end of which time it would have no salvage value. assuming it is kept for 3 more yrs.

  How will affect the quantity of output in the long run

Miguel is a farmer who produces oats. The oat market is a pure competition market. Miguel is now making choices in the short run. The going rate for oats is currently $24 per unit. The total cost function is as the table above shows. What is the p..

  How should it vary the original output and price

Modifying a product to increase its "value added" benefits customers and can enhance supplier profits. For example, suppose an improved version of a product increases customer value added by $25 per unit. (In effect, the demand curve undergoes a p..

  What is the annual equivalent cost for each motor

Power cost per kwh is $0.14. Annual maintenance, taxes and insurance will be 2.5% of the initial cost. a. What is the annual equivalent cost for each motor b. What is the IRR (Internal Rate of Return) on the incremental investment to select the more ..

  What is the minimum amount that the o&gs

Suppose that the inverse demand for shale gas is given by p = 400 - 2q. The private marginal cost of producing shale gas is PMC = 100 + q. Suppose that in order to produce shale gas at the PMC given above, the oil and gas (O&G) companies (that pro..

  Is the consumer maximizing his utility

a consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $30, and T-shirts cost $10. At the current rate of consumption, the marginal utility of jeans is 60, and the marginal utility of T-shirts is ..

  Find gross value added

Import Duty-1000  Excise Duty-1000 Outpout sold- 5000 Price per unit of output- 6 Change in stock-600 Intermediate Cost- 16,000 Subsidy-500

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