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tristanf123
14.02.2020 •
Business
Suppose Antonio gets utility from consuming two goods, burgers and fries. His utility function is given by U = √ BF = B 0.5F 0.5 , where B is the amount of burgers he eats and F the servings of fries. Antonio’s marginal utility of a burger is MUB = 0.5B −0.5F 0.5 and his marginal utility of an order of fries is MUF = 0.5B 0.5F −0.5 . Antonio’s income is $20, and the prices of burgers and fries are $5 and $2, respectively. What are Antonio’s utility maximizing quantities of burgers and fries?
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Ответ:
5 servings of fries and 2 burgers
Explanation:
The optimal solution to the maximization problem of a consumer is equivalent to the ratio of marginal utilities of goods and it is also equal to the price ratio of the goods. Mathematically:
The burgers and fries marginal utilities are
and
respectively while their prices are
and
respectively. Thus,
Further simplification:
F/B = 5/2 ; F = 2.5B
Using Antonio's budget income,
B = income/
- (
/
)*F
If we use the values in the problem, we have:
B = 20/5 - (2/5)*F = 4 - 0.4F
if we substitute F = 2.5B
B = 4 - 0.4*2.5B
B = 4 - B
B = 4/2 = 2
F =2.5B = 2.5*B = 2.5*2 = 5
Thus, given the budget constraint of Antonio, he can maximize his utility by eating 5 servings of fries and 2 burgers.
Ответ:
Grants/Scholarships - Federal student loans - Private Loans
-Grants/scholarships mean that you got somebody else to pays the tuition for you and you could pursue your education for free.
-Federal student loans allow you to obtain an amount of loan with low-interest rates and flexible term.
-Private loans probably the worst because the interest rates tend to be higher than the others.