This topic contains a solution. Click here to go to the answer

Author Question: Joe consumes crawfish and shrimp. His utility function exhibits diminishing marginal utility of ... (Read 130 times)

Destiiny22

  • Hero Member
  • *****
  • Posts: 557
Joe consumes crawfish and shrimp. His utility function exhibits diminishing marginal utility of crawfish but the marginal utility of shrimp is constant. Will Joe's indifference curves be convex?
 
  What will be an ideal response?

Question 2

If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of demand when price is 1.50 is
 
  A) -24.
  B) -16.
  C) -0.0054.
  D) -0.087.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Danny Ewald

  • Sr. Member
  • ****
  • Posts: 332
Answer to Question 1

Yes, Joe has quasi-linear utilitylinear in shrimp but diminishing in crawfish. This implies d2u/dC2 < 0. U(C,S) = u(C) + S where u(C) is an increasing, concave function. The slope of the indifference curve (MRS) is -du/dC. Differentiating again gives -d2u/dC2, which is positive by the assumption of diminishing marginal utility of crawfish.

Answer to Question 2

D




Destiiny22

  • Member
  • Posts: 557
Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review


CAPTAINAMERICA

  • Member
  • Posts: 325
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

For a complete list of videos, visit our video library