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1)Antarctica produces only party to and frozen fish The table shows the marginal benefit and marginal cost schedules for frozen fish if Antarctica produces frozen fish, the marginal benefit from recenfish the marginal cost ofterents To achieve locative efficiency, Antarctica must the quantity of frozen fish produced Frorenih Marginal Marginal benefit cost packs of ice per pack of fish) 94 95 O A ce decrease Bethan increase OG is less than decrease OD diners 97 90 99 29 50 TO 4 2 4 10 20 77 2)Suppose consumer's preferences are given by acl-7 -1 u(cl) = + In(), 1-7 where c> 0 is consumption, 1 > 0 is leisure, a > 0, and ye (0,1)
1)Antarctica produces only party to and frozen fish The table shows the marginal benefit and marginal cost schedules for frozen fish if Antarctica produces frozen fish, the marginal benefit from recenfish the marginal cost ofterents To achieve locative efficiency, Antarctica must the quantity of frozen fish produced Frorenih Marginal Marginal benefit cost packs of ice per pack of fish) 94 95 O A ce decrease Bethan increase OG is less than decrease OD diners 97 90 99 29 50 TO 4 2 4 10 20 77
2)Suppose consumer's preferences are given by acl-7 -1 u(cl) = + In(), 1-7 where c> 0 is consumption, 1 > 0 is leisure, a > 0, and ye (0,1). The consumer's budget constraint is c= w(1 - 1) +-T, where w is the real wage rate, is the dividend income, T is lumpsum taxes. Assume that W, 7, T are all exogenous and 7-T0. 1. Define the marginal utility of consumption, MU, and of leisure, MU. 2. Given the utility function above, determine MU, and MU. 3. Define the marginal rate of substitution of leisure for consumption, MRS..? 4. Given your answer from part 2, determine MRS.C. 5. Assuming y = 0.5, solve for equilibrium quantities of (e*,1").
3)
According to marginal analysis, optimal decision-making involves
Select one:
a. Taking actions only if the marginal cost is zero
b. Taking actions whenever the marginal benefit is positive
c. Taking actions whenever the marginal benefit exceeds the marginal cost
d. All of the above
A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is
Select one:
a. 20.0
b. 2.0
c. 10.0
d. 0.5
If a product has seasonal demand along the four quarters, and the annual demand is 8 Mn units with seasonality factor of 0.8, 1.1, 1.2 and 0.9 for the first quarter, second quarter, third quarter and fourth quarter respectively, then, its demand in the four quarters Q1, Q2, Q3 and Q4 respectively are
Select one:
a. 1.8 Mn, 2.1 Mn, 2.2 Mn and 1.9 Mn respectively
b. 1.4 Mn, 2.3 Mn, 2.6 Mn and 1.7 Mn respectively
c. None of the above
d. 1.6 Mn, 2.2 Mn, 2.4 Mn and 1.8 Mn respectively
The relationship between number of beers consumed (x) and blood alcohol content (y) was studied in 16 male college students by using least squares regression. The following regression equation was obtained from this study: y’= -0.0127 + 0.0180x. The above equation implies that
Select one:
a. each beer consumed increases blood alcohol by an average of amount of 1.8%
b. on average it takes 1.8 beers to increase blood alcohol content by 1%
c. each beer consumed increases blood alcohol by exactly 0.018
d. each beer consumed increases blood alcohol by 1.27%
A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is
Select one:
a. 20.0
b. 0.5
c. 2.0
d. 10.0
Expert Solution
1.Correct option is ' option B '
If Antarctica produces 98 frozen fish then marginal benefit from frozen fish is less than the marginal cost of frozen fish
To achieve allocative efficiency Antarctica must Increase the quantity of frozen fish produced because at efficiency level marginal benefit must be equal to marginal cost.
2.
I have done the first four parts for you. I hope it helps. Please don't forget to upvote.
1. Marginbal utility of consumption is the additional satisfaction (or utility) derived from additional unit of consumption (as compared to enjoying leisure). Since consumption is possible if the individual works, therefore utility from consumption is nothing but utility from labour (working). therefore, marginal utility of consumption is the additional utility derived from working for an additional hour.
Marginal utility of leisure is the additional utility derived from an additional hour spent in enjoying leisure instead of working for cunsumption.
2. Now,
3.
Marginal rate of substitution of leisure for consumption refers to the rate at which the individual is willing to give up units of leisure in order to have an additional unit of consumption. In simpler words, it is the rate at which an individual substitutes leisure hours for consumption.
MRSx,y = Units gained of good y/Units sacrificed of good x = dy/dx = MUx/MUy
4. MRS of leisure for consumption will be:
please see the attached file.
3.
1) Optimal decision making involves when marginal exceeds marginal cost. Option C is correct.
2) Price elasticity of demand = %change in quantity demanded / %change in price
%change in quantity demanded = 10%
%change in price = -20%
Price elasticity of demand = [10% / (-20%)] = -0.5
We can ignore the negative sign due to prevailing negative relationship between price and quantity demanded. Thus, elasticity of demand = 0.5
Option D is correct.
3) Grand average = (Annual demand / 4) = 2 per quarter
Demand in quarter would be: Seasonaily factor in every factor * Grand average
Demand in Quarter 1: 0.8 * 2 = 1.6
Demand in Quarter 2: 1.1 * 2 = 2.2
Demand in Quarter 3: 1.2 * 2 = 2.4
Demand in Quarter 4: 0.9 * 2 = 1.8
Option D is correct.
4) y = -0.0127 + 0.0180x
This equation states that slope of the line is 0.018 which means when there is change in x by 1, y change by 1.8%.
Option A is correct.
5) Price elasticity of demand = %change in quantity demanded / %change in price
%change in quantity demanded = 20%
%change in price = -10%
Price elasticity of demand = [20% / (-10%)] = -2
We can ignore the negative sign due to prevailing negative relationship between price and quantity demanded. Thus, elasticity of demand = 2
Option C is correct.
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