Business, 03.04.2020 02:28 preservations

Horace has the following utility function over two goods, x and y U(x, y)xy Let Y denote Horace's total income and P. and P, denote the prices of x and y, respectively

a. Derive the Horace's Marshallian (ordinary) demand functions for x and y. Do these demand functions satisfy the law of demand? Why or why not? b. Solve for the Horace's Hicksian demand functions for x and y.
b. Compute the substitution effect associated with an increase in the price of the x (ie. take the partial derivative of the Hicksian demand function for x with respect to the price of x). Is it positive or negative?
c. Write down the Horace's expenditure function E(P, P, U). Use Shephard's Lemma

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 10:50

Bill dukes has $100,000 invested in a 2-stock portfolio. $62,500 is invested in stock x and the remainder is invested in stock y. x's beta is 1.50 and y's beta is 0.70. what is the portfolio's beta? do not round your intermediate calculations. round the final answer to 2 decimal places.

Answers: 2

Answer

Business, 22.06.2019 12:50

Two products, qi and vh, emerge from a joint process. product qi has been allocated $34,300 of the total joint costs of $55,000. a total of 2,900 units of product qi are produced from the joint process. product qi can be sold at the split-off point for $11 per unit, or it can be processed further for an additional total cost of $10,900 and then sold for $13 per unit. if product qi is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?

Answers: 2

Answer

Business, 22.06.2019 20:10

Suppose the production function in an economy is y = k0.5l0.5, where k is the amount of capital and l is the amount of labor. the economy begins with 64 units of capital and 16 units of labor. use a calculator and equations in the chapter to find a numerical answer to each of the following questions. what are the wage and the rental price of capital? the wage is equal to unit(s) of output and the rental price of capital is equal to unit(s) of output.

Answers: 1

Answer

Business, 22.06.2019 20:40

Helen tells her nephew, bernard, that she will pay him $100 if he will stop smoking for six months. helen was hopeful that if bernard stopped smoking for six months, he would stop altogether. bernard stops smoking for six months but then resumes his smoking. helen will not pay him. she says that the type of promise she made cannot constitute a binding contract and that, furthermore, it was at least implied that he would stop smoking for good. can bernard legally collect $100 from helen

Answers: 1

Answer

You know the right answer?

Horace has the following utility function over two goods, x and y U(x, y)xy Let Y denote Horace's to...

Questions