Write an equation for time allocation budget constraint

Assignment Help Econometrics
Reference no: EM13179081

Two individuals, Chip and Holly, are stranded on an island. The island has plenty of vegetation. Chip and Holly can spend their day either gathering food, which they then eat themselves as they gather it (private good) or collecting firewood for warmth that evening. Both contribute their share of collected wood to a pile at the end of the day and burn the whole pile, the warmth from which they both enjoy together (public good). Each individual sleeps 8 hours a day thus leaving 16 hours to either collect wood (W) or pick food (F). Both individuals have the same preferences, represented by the following utility function:

UC = 5ln(FC) + 3ln(WC + WH)

A. Write the expression for Chip's time allocation budget constraint (in terms of hours). Include subscripts.

B. Use the given utility function and the budget constraint from part A to solve for Chip's best response function for the number of hours collecting firewood taking the number of hours Holly spends (WH) as given.

C. Solve for the privately optimal number of hours Chip spends collecting firewood. Hint: The problem is symmetric for Holly and Chip.

D. Solve for the publicly optimal number of hours Chip and Holly spend collecting firewood combined.

Reference no: EM13179081

Questions Cloud

State what is the concentration of cobalt : Suppose a 500mL solution contains 2.00 millimoles of Co(NO3)2, 150.0 millimoles of NH3, and 150.0 milllimoles of Ethylendediamine (en). What is the concentration of Cobalt 2+ (aq) in the solution?
How high does it go before returning to the ground : How high does it go before returning to the ground?
What dosage maximizes sensitivity : WHat dosage maximizes the temperature change? The sensitivity of the body to the drug is defined as dT/dD. What dosage maximizes sensitivity?
Compute the molecular mass of methyl ethanoate : The molecular mass of propanoic acid is 75.1 amu. Calculate the molecular mass of methyl ethanoate, an isomer of propanoic acid. Express your answer with appropriate units.
Write an equation for time allocation budget constraint : Use the given utility function and the budget constraint from part A to solve for Chip's best response function for the number of hours collecting firewood taking the number of hours Holly spends (WH) as given. C. Solve for the privately optimal ..
How many gallons of gas would he need to drive miles : Felipe drove miles using gallons of gas. At this rate, how many gallons of gas would he need to drive miles?
The book value of the equipment inventory : What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory?
Find out the concentration of x in an unknown solution : To determine the concentration of X in an unknown solution, 1.00 mL of 8.01 mM S was added to 4.00 mL of the unknown X solution and the mixture was diluted to 10.0 mL
How should the company fill the order : The company receives an order for 580 notepads, together with a check for $328. If the order fails to specify the number of each type, how should the company fill the order?

Reviews

Write a Review

Econometrics Questions & Answers

  How to calculate monthly payment

For the same loan described under Q1, the individual decides that instead of selling the house after the 71st payment, to keep it and shorten the pay off period by increasing the montly payment by $150 each month. What is the number of months re..

  What is economics system

What is economics system? What are the types of economics system? Briefly explain each type of economics system by giving examples of nations that are close to each type

  Multiple choice questions related to market concentration

Determine when a competitively produced product generates negative externalities in production, the industry will,

  Determine the total tax paid by producer

Suppose the demand for a product is given by P = 50 - Q. Also, the supply is given by P = 10 + 3Q. If a $12 per unit excise tax is levied on the buyers of a good, after the tax,what is the total quantity of the good sold.

  Fitting a straight line to a set of data yields

An agent for a residential real estate company has the business objective of developing more accurate estimates of the monthly rental cost for apartments. Toward that goal, the agent would like to use the size of an apartment, as defined by square..

  Write down the probability mass function

Simple linear regression predicting the change in performance (in seconds taken to run a race) for 800m runners by the average hours of training undertaken per week during the pre-season.

  What is the amount of economic investment

Assume that a national restaurant firm called BBQ builds 20 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $300,000 of equipment and furnishings

  Determine the total quantity of monthly accounts

In a local market, the monthly price of internet access service decreases from $30 to $20, and the total quantity of monthly accounts across all internet access providers increases from 90,000 to 190,000.

  Gdp of brazil and the united states

Determine what is the state of the economy in brazil versus the united states and discuss the GDP of brazil and the united states?

  Calculate the net private benefits of the project

Calculate the net private benefits of the project to the foreign-owned company, as a net present value and calculate the net social benefits of the project from the viewpoint of the Australian economy, with the same criterion.

  What life of the insulated tank has the lowest euac

The Clap Chemical Company needs a large insulated stainless steel tank to expand its plant. Clap has located such a tank at a recently closed brewery. The brewery has offered to sell the tank for $15,000 delivered.

  Illustrates the market for internet services

If the government imposes a tax of $15 a month on the market, what price would the buyer of an Internet service pay?__________ What price would the seller of the Internet service receive?____________________

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