Suppose that the preferences a typical American has for quantities of electricity (E) and gasoline (G) is given by U(E,G) = a ln(E) + (1 - a) ln(G) where 0 < a < 1.
Suppose the prices of gasoline and electricity in the units provided are both 1/unit and the consumer has an income of 100. Suppose in addition, the government has chosen to ration electricity by allowing a maximum consumption of 50 units of electricity (E 50). a. If a = .25, find the optimal consumption bundle of gasoline and electricity. Does the electricity rationing constraint have an influence on consumer's choice? b. If a = .75, find the optimal consumption bundle of gasoline and electricity. Does the electricity rationing constraint of the government have an influence on the consumer?
Question 2
The above figure depicts the Edgeworth box for two individuals, Al and Bruce. If the endowment is at point a, and Bruce has no ability to bargain, the final allocation will be at point
A) a.
B) b.
C) c.
D) d.
American Foxhound
American Hairless Terrier
Cutaway diagram of a four cylinder gasoline engine
American Lives: Davy Crockett
North American Climates
Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ...