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Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compute the interior solution. 6.2 Compute the interior solution where q1 > 0 and q2 = 0. 6.3 Under what conditions on prices and income is the corner solution obtained?
Individual A has UA(XA,YA)=lnXA+2YA and has $500. PX=5 and PY =10. (a) Find the optimum. Show that it is indeed the maximum. (b) PX=10. Find the new optimum. (c) Calculate
This problem substitutes financial health with housing in a 2 period consumption savings model. The representative consumer has the utility function u(c1, c2) = lnc1 + lnc2 with ea
what are the limits of the trade between franci and galacia
i want a project topics in macroeconomics
Q. Relation between nominal and real interest rate? Relation between nominal interest rate, real interest rate and inflation If we signify the nominal interest rate by R
Ashley can join a club for an annual fee of $20. if she can purchase golf balls at 40% off the retail price. Draw ashly's budget constraint if she joins and if she does not join th
Question 1: Discuss why living standards are higher in some countries than others. Question 2: (a) How is inflation measured? (b) What are the causes and consequence
What causes economic growth? Causes of economic growth: Into the Solow model, economic growth is based onto the quantity and quality of technology and resources. Growth
REVEALED PREFERENCE APPROACH The downward slope of the demand curve was justified on the basis of utility derived by the consumer. But specification of consumer tastes in form
Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different income streams.
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