Write a budget constraint equation

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Reference no: EM131614532

Question 1:

Which of the following pairs of goods are complements and which are substitutes? Are the goods that are substitutes likely to be perfect substitutes?

a. Printer and ink.

b. iPhone and Galaxy Samsung.

c. Online education institutions and traditional "ground" education institutions.

d. Digital cable television and a digital video recorder (DVR).

e. Automobiles and gasoline.

Question 2:

If Joshua views three cups of coffee as a perfect substitute for one cup tea and vice versa, what is the marginal rate of substitution between coffee and tea?

Question 3:

Nicole wants area rugs and painting for her new house. She has been given a budget of $7,200 for this purpose. The area rugs that she wants can be purchased for $900 and paintings from a local Wyoming artist can be purchased for $400.

a. Using Excel's charting tool, draw Nicole's budget constraint.
Write a budget constraint equation for Nicole:

b. For a limited time only Nicole can purchase area rugs at a price of $600, the cost of the paintings remain constant and now her budget has decreased to $6,000. Using Excel's charting tool, draw a new budget constraint curve. Would the budget constraint curve be likely to shift to the left or right?

Write a new budget constraint equation for Nicole:

Question 4:

What are the main types of capital, labor, and land used to produce paper?

Question 5:

Based on the information in the Mini-Case "Malthus and the Green Revolution," how did the average product of labor in the food production change over time?

Question 6:

Christopher bought a $125 ticket to attend Nickelback concert in Red Rocks. Because it is his favorite rock group, he would be willing to pay up to $200 to attend the concert. However, his friend Keith invites Christopher to go with him to Water World in Denver, but he is only willing to pay up to $100. What is his opportunity cost of going to the Nickelback concert in Red Rocks ?

Question 7:

Use the following table to answer the questions listed below.

Total Output Cost TFC TVC AFC AVC ATC MC
0 20            
10 40            
20 60            
30 90            
40 120            
50 180            
60 280            

a. Calculate the total fixed costs, total variable costs, average fixed costs, average variable costs, average total costs, and marginal costs.

b. Plot the cost curves. (Hint: Graph total costs curves separate from average costs and marginal cost curves).

c. At what quantity of output does marginal cost = average total cost and quantity of output in which marginal cost = average variable cost.

Verified Expert

This assignment was done using MS Excel. A basic knowledge of managerial economics and concepts were used. Also, MS Excel graphs are employed for visualisation. The assignment asked for concepts of substitute and complementary goods, marginal rate of substitution, budget line, factors of production, opportunity costs, marginal cost and cost curves.

Reference no: EM131614532

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Reviews

inf1614532

10/9/2017 4:36:11 AM

I have got the complete solution along with question 5, It was awesome thank you very much. I will definitely recommend you to my friends. i will also approach another task soon.

inf1614532

10/9/2017 4:35:21 AM

As per the Attached sheet in the trail mail, in the Question 5, it is quoted that " Based on the information in the Mini-Case "Malthus and the Green Revolution, ................" But no such information is provided. I just sent her an email and she said that we need to search google for that information

len1614532

8/26/2017 1:03:08 AM

b. Plot the cost curves. (Hint: Graph total costs curves separate from average costs and marginal cost curves). c. At what quantity of output does marginal cost = average total cost and quantity of output in which marginal cost = average variable cost.

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