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The consumer's utility function is u(x1,x2) = (x1) (x2)^2 (a) Graph his budget constraint for p1 = 3, p2 = 2 and M = 900, and write down the equation for his budget line. (b)
Consider a market where supply and demand are given by QXS = -12 + PX and QXd = 78 - 2PX. Suppose the government imposes a price floor of $35, and agrees to purchase any and all un
An economy has the following parameter values: s ?=.3,d ?=.1,A ?=1,andL ?=100.2 The economy begins at steady state but at some point is attacked by Godzilla, destroying 70% of the
Suppose that quantity demand falls by 30% as a result of a 5% increase in price. What would be the price elasticity of demand for this good?
ChoppinAxe is a small Swedish firm that produces wood planks and operates in a perfectly competitive market. Every firm in the market has the following total cost function: C(qi
Two people are engaged in a joint project. If each person i puts in the effort x i , the outcome of the project is worth f ( x 1, x 2). Each person's effort level x i is a
1 . Use the AS/AD model to a . Demonstrate graphically and explain verbally the situation the US economy is currently in. b. In the diagram you drew for part (a) above, sh
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