Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

I don't know where to start

1. Alex's preferences for bagels and wine can be isolated and examined. Assume that Alex's budget is $200. Bagels cost $2.00 each and wine costs $10.00 per liter. Assume that Alex spends all of his income on bagels and wine in order to maximize his total utility.

a) prepare the equation for his budget line. What is the slope of the budget line and what does it mean? Draw the budget line. Use the X-axis for bagels and the Y-axis for wine.

b) Draw Alex's preferences map and superimpose the budget line. Label Alex's utility-maximizing combination of bagels and wine as point "A." What is meant by the "utility-maximizing combination of bagels and wine?"

c) Now consider Sally; Sally is currently spending her entire budget on bagels. She purchases no wine.

d) Draw Sally's indifference curves and describe her consumption choices in term of marginal utility.

e) Consider alternative strategies wine manufacturers could use to target Sally and consumers like her (i.e. lowering price of wine, advertising, free samples).

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M928128

Have any Question? 


Related Questions in Business Economics

Dannyrsquos delights is a wholesale bakery danny makes a

Danny’s Delights is a wholesale bakery. Danny makes a variety of baked goods which he sells to restaurants and grocery stores. His best-selling item is a peanut butter cookie. The recipe calls for 1 cup of peanut butter, ...

In a duopoly where possible options are to retain the

In a duopoly where possible options are to retain the collusive price (collude) or to lower the price in attempt to increase the firm's market share (cut). Consider the following payoff matrix for a game in which two fir ...

Tyler just wrecked his new nissan and the accident was his

Tyler just wrecked his new? Nissan, and the accident was his fault. The owner of the other vehicle got two estimates for the? repairs: one was for ?$796 and the other was for ?$845 . Tyler is thinking of keeping the insu ...

Stan moneymaker needs 13 gallons of gasoline to top off his

Stan Moneymaker needs 13 gallons of gasoline to top off his? automobile's gas tank. If he drives an extra eight miles? (round trip) to a gas station on the outskirts of? town, Stan can save ?$0.06 per gallon on the price ...

Latin america has a wealth of regional trade agreements

Latin America has a wealth of regional trade agreements. Look into Chile’s recent agreement with China and analyze their likely effects on exports and imports. What products are most likely to be involved in expanded Chi ...

A business must make a payment of 40000 five years from now

A business must make a payment of $40,000 five years from now. To fund that future payment, the business will deposit money today into an account which will earn 0.49% per month. How much must the business deposit today, ...

To prepare for solving a problem we must first acknowledge

To prepare for solving a problem, we must first acknowledge that the problem exists. Then, we must accept it, and clearly define or identify it. Finally, we must commit to solving the problem. Without some degree of pers ...

Which of the following explains why big business typically

Which of the following explains why big business typically spends more on rent-seeking activities than consumers? A. Lobbying is a public good to consumers. B. Lobbying is a public good to businesses. C. Labor unions in ...

Imagine that you are the owner of a day-care center and

Imagine that you are the owner of a day-care center and that parents consistently pick their children up late. Your clearly stated policy is that children are supposed to be picked up by 5:30 pm. This makes pick-up time ...

How would the value of a firm be affected by the following

How would the value of a firm be affected by the following events? a. The introduction of a new product designed to increase the firm's cas inflows is delayed by one year. The size of expected cash flows is not affected. ...

  • 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