Business, 16.04.2020 22:30 jason8093

A Californian student consumes Internet services (I) and books (B). Her preferences are represented by a Cobb-Douglas utility function of the type: U(I, B) = I .5B.5. Initially Y = 100, PI = PB = 1. Lately, however, because of the electricity shortage, the price of the Internet services has increased to 2. The government has decided to give a transfer to the student so that she can recover her initial welfare. In order to determine the transfer the government has hired three consultants who have made the following suggestions:

Consultant A: The transfer should allow the student to buy her initial bundle.
Consultant B: The transfer should allow the student to get her initial level of utility.
Consultant C: The government should give her a transfer of 20.

a. Using the expenditure function, find the amount of the transfer implied by consultant A.
b. Find the amount of the transfer implied by consultant B.
c. Determine whether the consumer is better or worse off from Consultant Cʹs suggestion than before the price increases.

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 20:30

Licensing is perhaps the easiest method of entering into international trade. another method of entering international trade, which can be relatively low risk, is which opens several levels of involvement to company

Answers: 2

Answer

Business, 22.06.2019 19:00

Read the scenario. alfonso is 19 years old and has a high school diploma. recently, he was promoted to assistant manager at the fast-food restaurant where he has worked since the age of sixteen. his dream is to become the restaurant’s manager. what is his best option for achieving his dream? he should find another job and work his way up to a higher position. he should hope that his manager transfers to another location and that he is his replacement. he should attend classes at the local college to receive training in management. he should work hard, work longer hours, and remain assistant manager.

Answers: 2

Answer

Business, 22.06.2019 20:00

Assume the perpetual inventory method is used. 1) the company purchased $12,500 of merchandise on account under terms 2/10, n/30. 2) the company returned $1,200 of merchandise to the supplier before payment was made. 3) the liability was paid within the discount period. 4) all of the merchandise purchased was sold for $18,800 cash. what effect will the return of merchandise to the supplier have on the accounting equation?

Answers: 2

Answer

Business, 22.06.2019 20:30

What talents or skills do u admire most in others

Answers: 2

Answer

You know the right answer?

A Californian student consumes Internet services (I) and books (B). Her preferences are represented...

Questions