Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

The solution to Utility maximization

Sam enjoys collecting old editions of microeconomic theory books. Unfortunately, he has no income from employment, but he does accept bags of trash to be buried in his yard for a fee. Suppose the price of each old edition microeonomic book is $2, and San charges $1 for each bag of trash. Sam's utility is given by: U = min(2B, 20-T), where B is the number of old edition books, and T is the number of bags of trash collected by Sam. Note: U is the minimum of 2B and 20 - T, and so this is not a differentiable function.

A. With T on the vertical axis and B on the Horizantal axis, graph Sam's indifference curve for U = 4

B. Determine the values of B and T that maximize Sam's utility.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M927839

Have any Question? 


Related Questions in Business Economics

Purely competitive wheat farmer can sell any wheat he grows

Purely competitive wheat farmer can sell any wheat he grows for $20 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce ...

In quarter 5 the demand is 8472091 units and supply is

In quarter 5 the demand is 8,472,091 units and supply is 8,687,459 units at equilibrium. In quarter 6 supply inccreased to 9,593,212 and demand to 8,725,230. Is the market getting closer to short-run equilibrium where ma ...

Risk takingbased on your experience respond to the

Risk Taking Based on your experience, respond to the following problem. Discuss. One of the reasons Joseph Schumpeter argued that capital was doomed was because he predicted that big corporations would naturally shift aw ...

Florida citrus mutual an agricultural cooperative

Florida Citrus Mutual, an agricultural cooperative association for citrus growers in Florida, needs to predict what will happen to the price and output of Florida oranges under the conditions below. What are your predict ...

Suppose that victoria and her friends are running a

Suppose that Victoria and her friends are running a fundraiser by selling donuts. They want to know what will happen to their revenue if they increase the price of each donut from $0.80 to $1. What concept do they need t ...

The russian air force is being called on this year to

The Russian air force is being called on this year to intercept storms advancing on Moscow and to seed them with dry ice and silver iodine particles. The idea is to make the snow drop on villages in the countryside inste ...

Anderson and kay are two individuals who one day discover a

Anderson and Kay are two individuals who one day discover a stream that flows wine cooler instead of water. Anderson and Kay decide to bottle the wine cooler and sell it. The marginal cost of bottling wine cooler and the ...

Suppose the demand for wheat increased dramatically between

Suppose the demand for wheat increased dramatically between 1950 and 2000 but the equilibrium quantity increased only slightly. Absent any other changes, what could explain the small increase in the equilibrium? The equi ...

Health care is so special that price will never matter

Health care is so special that price will never matter. People will either buy what medical care they need, or they will just go without treatment if they can't afford the fees. Do you agree with this statement, disagree ...

Helen has a utility function given byux05y05 2 where x is

Helen has a utility function given byU=[x^0.5+y^0.5 ]^2, where x is the amount of product X consumed per month and y is the amount of product Y consumed per month. The government has instituted rationing. Everyone receiv ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate