1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sladkaya [172]
3 years ago
7

There are two people in the economy: Martha and Charlie. There are two goods in the economy: books and wine. Martha is endowed w

ith 110 books and 20 wine bottles, while Charlie is endowed with 20 books and 45 wine bottles. Denote books with, b, and wine with, w. Martha has the utility function: U(b,w) = 6b+24w. Charlie has the utility function: U(b,w) = bw. At a pareto optimal allocation, the price of books is $1, while the price of wine is $4. How many books does Charlie consume at a pareto-optimal allocation in the exchange equilibrium?
Business
1 answer:
balu736 [363]3 years ago
3 0

Answer:

Charlie consumes 100 books and 25 wines at pareto-optimal allocation, is the right answer.

Explanation:

According to the question, book is denoted with b whereas, wine is denoted with w.

The Utility function of Martha is-  U\left ( b,w \right )=6b+24w

The Utility function for Charlie is- U\left ( b,w \right )=bw

P_{b} = $1 : P_{w} = $4

At pareto-optimality,

MRS_{bw}=\frac{P_{b}}{P_{w}}\\\frac{w}{b}=\frac{1}{4}\\4w=b\\

The budget constraint,

1.b+4.w=m=1\left ( 20 \right )+4\left ( 45 \right )\\b+4w=20+180\\4w+4w=200\\w=\frac{200}{8}=25\\\therefore b=100

Therefore, it may be said that Charlie must consume 100 books and 25 wine at pareto-optimal allocation.

You might be interested in
Adrian Corp. sells goods on account for $100,000 on May 1. On May 15, the customer returns $40,000 of the merchandise. The custo
ololo11 [35]

Answer:

C. DEBIT TO SALES RETURNS

D. CREDIT TO ACCOUNTS RECEIVABLE

Explanation:

The journal entry to record the May 15 transaction is shown below:

Sales return and allowance A/c Dr $40,000

                     To Accounts receivable $40,000

(Being sales return is recorded)

For recording the given transaction we debited the sales return and credited the account receivable. Both are recorded for $40,000

5 0
2 years ago
7.37 For the net cash flow series, (a) determine the number of possible i* values using the two sign tests, (b) find the EROR us
nlexa [21]

Answer:

The answer is 25.19% .

Note: The values were not stated for the net series cash flows, during my research and i found the complete question and solved it.

Explanation:

<em>From the question given,</em>

<em>The first step is to make use of a table for the net cash flow series</em>

<em>Year                      1                  2                3              4             5             6</em>

<em>Net cash flow    $4100   $2000         $7000         $12000  $700       $800</em>

<em>Then,</em>

<em>Solution : MIRR is defined as modified internal rate of return, It accounts for the positive cash flows with reinvestment by using re-investment rate and negative cash flows are calculated at their present values to keep the fund aside by using finance rate. </em>

<em> As given also reinvestment rate = 20% and finance cost rate = 10%. </em>

<em> Now, from the table given of cash flows, we will calculate the future value of all cash flows in year 6. </em>

<em> FV = 4100*(1+0.20)^5 + 12000*(1+0.20)^2 + 800*(1+0.20)^0 = $28282.11 </em>

<em> Now,</em>

<em> By applying the rate of   we will computer teh PV of -ve cash flows : </em>

<em> PV = -2000/(1+0.1)^2 + -7000/(1+0.1)^3 + -700/(1+0.1)^5 = -$7346.73 </em>

<em> Now MIRR can be calculated by using the formula , MIRR = \√[n]{FV(positive cash flows/PV of negative cash flows)}-1 = \√[6]{28282.11/7346.74)}-1 </em>

<em> MIRR = 1.2519-1 = 0.2519 or 25.19% </em>

<em> Therefore, the only value Possible = 25.19% in this case.</em>

5 0
3 years ago
A stock’s price fluctuations are approximately normally distributed with a mean of $29.51 and a standard deviation of $3.87. You
Ivahew [28]

Answer:

$34.46

Explanation:

In this Question there is Highest value of 10% and the probability of 90%.

we will use following formula to calculate the highest value of the stock

z value = ( x - mean ) / Standard deviation

where

x = the highest value

z score value at 10% = 1.28

Placing value in the formula

1.28 = ( x - $29.51 ) / $3.87

1.28 x $3.87 = x - $29.51

$4.9536 = x - $29.51

x = $4.9536 + $29.51

x = 34.4636

8 0
3 years ago
Both Phoebe and Connor are trying to maximize their lifetime income. Each has a different plan on how to do it best. Phoebe clai
andrew11 [14]
The correct answer is C. By attending college, Connor actually stands better prospects to earn a significant salary throughout his lifetime. Employees having gone through post-secondary education generally earn more income than those who have not studied till college. The simple reason is, by attending college, you acquire sharper knowledge and insights of disciplines you wouldn't otherwise have access to. You get skills that are in line with a demanding and fast-paced environment. People often regret not attending college because they could have grabbed a certificate that could have been a stepping stone for professional opportunities and higher incomes.
7 0
2 years ago
Read 2 more answers
Pioneer has developed a new consumer electronics item-a heterogeneous shopping product with unique patented features. it probabl
Feliz [49]
<span>Answer: Pioneer has developed a new consumer electronics item-a heterogeneous shopping product with unique patented features. it probably should use a marketing mix of-Selective distribution, skimming pricing, pioneering.</span>
8 0
2 years ago
Other questions:
  • Very few people in the United States today attempt to follow the example of Henry David Thoreau in On Walden Pond and "go into t
    5·2 answers
  • The 2011 income statements of Leggett &amp; Platt, Inc., reports net sales of $3,636.0 million in 2011 and $3,359.1 million in 2
    9·1 answer
  • _________ payments are known as lump sums. We can solve for the future value or the present value of a lump sum as we discuss be
    6·1 answer
  • The following items were drawn from a company’s accounting records: (1) Accounts receivable (2) Accounts payable (3) Cash paid t
    5·2 answers
  • Bob contributed a building with an adjusted basis to Bob of $50,000 and a fair market value of $150,000 subject to a mortgage of
    14·1 answer
  • Which of the following causes the master budget variance between the amounts in the master budget and the flexible budget of a r
    14·1 answer
  • Why should workplaces offer opportunities for advancement? Should this apply to every employee?
    10·1 answer
  • Keys Corporation's 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-
    9·1 answer
  • Striking Apparels has launched its new stock of summer wear. It plans to target shoppers between the ages of twenty and thirty t
    7·1 answer
  • Ben and jerry would not be considered transformational leaders because they did not?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!