![subject](/tpl/images/cats/ekonomika.png)
Perfect substitutes almost always have boundary solutions, which are found in a different way than interior optima. The demand functions from perfect substitutes are contingent; specifically, they depend on the slopes of the indifference curves and the budget line.
Consider a utility function u(x1,x2)=ax1+bx2 and a general-form budget line p1x1+p2x2=m.
If the absolute value of the slope of the indifference curve, a/b, is greater than the absolute value of the slope of the budget line, p1/p2, the consumer will find it optimal to consume.
1. Choose one:
a. any combination of goods 1 and 2 she can afford.
b. all of good 2 she can afford and none of good 1.
c. a combination of goods 1 and 2 such that exactly half her income is spent on each good.
d. all of good 1 she can afford and none of good 2.
2. In such a case, demand for good 1 is x∗1(p1,p2,m)=x1∗(p1,p2,m)=
a. m/p2
b. m/2p2
c. 0
d. m/p1
e. m/2p1
![ansver](/tpl/images/cats/User.png)
Answers: 3
Another question on Business
![question](/tpl/images/cats/ekonomika.png)
Business, 22.06.2019 17:00
Afinancing project has an initial cash inflow of $42,000 and cash flows of −$15,600, −$22,200, and −$18,000 for years 1 to 3, respectively. the required rate of return is 13 percent. what is the internal rate of return? should the project be accepted?
Answers: 1
![question](/tpl/images/cats/ekonomika.png)
Business, 22.06.2019 21:50
Varto company has 9,400 units of its sole product in inventory that it produced last year at a cost of $23 each. this year’s model is superior to last year’s, and the 9,400 units cannot be sold at last year’s regular selling price of $42 each. varto has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each, or (2) they can be reworked at a cost of $251,100 and then sold for $34 each. prepare an analysis to determine whether varto should sell the products as is or rework them and then sell them.
Answers: 2
![question](/tpl/images/cats/ekonomika.png)
Business, 23.06.2019 02:30
How is the role of government determined in the american free enterprise system?
Answers: 2
![question](/tpl/images/cats/ekonomika.png)
You know the right answer?
Perfect substitutes almost always have boundary solutions, which are found in a different way than i...
Questions
![question](/tpl/images/cats/mat.png)
Mathematics, 30.05.2020 20:02
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/istoriya.png)
History, 30.05.2020 20:02
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/ekonomika.png)
Business, 30.05.2020 20:02
![question](/tpl/images/cats/geografiya.png)
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/mat.png)
Mathematics, 30.05.2020 20:03
![question](/tpl/images/cats/fizika.png)
![question](/tpl/images/cats/mat.png)
Mathematics, 30.05.2020 20:03
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/biologiya.png)
![question](/tpl/images/cats/en.png)
![question](/tpl/images/cats/mat.png)
![question](/tpl/images/cats/fizika.png)
![question](/tpl/images/cats/fizika.png)
![question](/tpl/images/cats/ekonomika.png)