« previous next »

Author Question: Alison consumes only tea and cookies and consumes them only in equal proportions. What is Alison's ... (Read 71 times)

chandani

  • Hero Member
  • *****
  • Posts: 541
on: Jul 1, 2018
Alison consumes only tea and cookies and consumes them only in equal proportions. What is Alison's income elasticity of demand for tea?
 
  What will be an ideal response?

Question 2

All Nash equilibria consist of Dominant Strategies
 
  Indicate whether the statement is true or false


chjcharjto14

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jul 1, 2018
Answer to Question 1

First, derive the demand equation using the budget constraint and the fact that T = C. Then
T = I/(pt + pc)
Using calculus,
T/I = -I/(pt + pc)2
The income elasticity is:
T = -I/(pt + pc)2  (I/T) = -1

Answer to Question 2

False. Games with multiple Nash equilibria are not DS.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Demonstration of equal segregation within one meiocyte in the yeast S. cerevisiae Demonstration of equal segregation within one meiocyte in the yeast S. cerevisiae
Pressure testing the cooling system. A typical hand-operated pressure tester applies pressure equal ... Pressure testing the cooling system. A typical hand-operated pressure tester applies pressure equal ...
NO-BAKE COOKIES NO-BAKE COOKIES
Barbie’s Proportions Barbie’s Proportions
Phenotype proportions in the progeny of a dihybrid cross performed by Mendel Phenotype proportions in the progeny of a dihybrid cross performed by Mendel
Cookies activities for senior kindergarten Cookies activities for senior kindergarten
Video: Osmosis - water transport

For a complete list of videos, visit our video library