Consider a consumer with utility function u(x1, x2) = min{2×1, x2} and income m who faces given pric… Show more Consider a consumer with utility function u(x1, x2) = min{2×1, x2} and income m who faces given prices p1 and p2. (a) Derive the demand function of good 1. (b) Whatistheoptimalconsumptionofgood1ifm=6andp1 =p2 =1? (c) Draw the budget constraint, optimal choice and indifference curve going through this optimal choice. (d) Imagine that the price of good 1 increases to p1 = 4. What is the optimal demand of good one now? (e) Draw the new budget constraint, optimal choice and indifference curve going through this optimal choice. (f) What is the effect of the increase in price on the consumption of good 1? How much of this effect in consumption is due to the income effect and how much to the substitution effect? • Show less

1. Consider a consumer with utility function u(x1,x2) = x1x2 and income m who faces given prices p1

5. A local restaurant initially estimated a large demand for dining in a space near a floor-to-ceili

4. AppsAlot is a small company that develops a variety of apps for smart phones. Management desires

3. Your buddy Gabe owns a sports restaurant/bar in St. Louis. On a recent visit, Gabe shared the fol

what is the ratio of a rich family

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How to calculate tax ratio?

An economy produces 2 goods soda a beer. Fully explain why the marginal cost function in the beer in… Show more An economy produces 2 goods soda a beer. Fully explain why the marginal cost function in the beer industry derives from the marginal benefits of the soda that is given up when beer is produced. • Show less

Explain how the price-specie-flow mechanism operates to maintain balanced trade between countries. W… Show more Explain how the price-specie-flow mechanism operates to maintain balanced trade between countries. What are the assumptions that are critical to the mechanism’s successful operation? • Show less