Introduction Over the past decade‚ medical costs have increased more rapidly than other consumer costs. Americans spent 2.5 trillion on health care in 2009 according to Medicare’s Office of the Actuary. That figure translates into approximately $8‚086 per person‚ or 17.6 percent of the nation’s gross domestic product (GDP).1 Health care costs more than tripled from 1990 to 20092 and are projected to rise to 19.6 percent of GDP in 2019.3 “The 4 percent increase from 2008 levels represented
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Consumer Choice Exercise 1. Function U allows us to know how that agent orders different combinations of goods x e y according to his preferences. For each of the following representations what is the shape of the indifference curves and what is the marginal rate of substitution (MRS)? What does that tell you about the agent’s preferences? a. U x 2 y x y b. U min ‚ 3 4 c. U xy d. U x 2 y Exercise 2. Consider the following utility functions: a. U ( x‚ y) ( x
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Q.1. What are indifference curves? Explain the consumers’ equilibrium under the assumptions of ordinal approach. Utility of goods cannot be measured in terms of précised quantitative term. J. R. Hicks and R.G.D. Allen developed Indifference Curve analysis based on ordinal approach. Indifference curve (IC) is defined as the locus of point which show the different combination of two goods or commodities a consumer is indifferent about the point A or B or C or D. According to this analysis the consumer
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they maintained without any compromise in taste. This resulted in a shift of the utility curve towards the right‚ whereby consumers got a higher level of satisfaction‚ by consuming products from a bigger brand which believed in far better hygienic procedures (Ref graph). With this in mind‚ they evolved a competitive pricing strategy to survive and grow in the market dominated by smaller players. INDIFFERENCE CURVE ANALYSIS Haldiram’s has a huge product portfolio and sought to customize its products
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10) B (6‚ 2) C (0‚ 4) D (8‚ 10) E (4‚ 6) b. Assume A is indifferent to B. On a single line‚ list all the bundles in descending order of preference using (≻) to denote strict preference and (∼) to denote indifference between adjacent pairs as‚ e.g.‚ in the form A ≻ B ≻ C ∼ D ≻ E. 2. Consider an economic agent who has preferences that are represented by the utility function: u(x‚ y) = √ xy a. For each pair of bundles A and B‚ indicate whether A ≻ B‚ A ≺ B‚ or A ∼ B. A B (4‚ 7) (7‚ 10) (8‚ 4) (2‚ 8)
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E (4‚6) (b) Assume A is indifferent to B (A ∼ B). On a single line‚ list all the bundles in descending order of preference using ( ) to denote strict preference and (∼) to denote indifference between adjacent pairs. In other words‚ use the form: A B C D E Answer: D E A∼B C‚ or D E B∼A C. 10 2 2. Consider an economic agent who has preferences that are represented by the utility function: u(x‚ y) = √ xy (a) for each pair of bundles A and B‚ indicate whether A B ‚ A B‚ or A ∼ B (but of course
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For Monash University Students: If you have studied intermediate level microeconomics this will be easy reading. Please assist fellow students. Financial Markets bring together borrowers and lenders of funds. They bring aggregate saving into equality with aggregate investment. Consumers have different time preferences for their consumption. Producers use capital until its marginal revenue productivity equals its opportunity cost in interest charges. These are Paretian optimal solutions for welfare
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X rose to $4 and the price of Y rose to $9‚ how much would Murphy’s income have to rise so that he could still afford his original bundle? a. $700 b. $450 c. $350 d. $1‚050 5. Charlie has the utility function U(xA‚ xB) = xAxB. His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and a. 40 bananas. b. 83 bananas. c. 20 bananas. d. 87 bananas. e. 80 bananas. 1 6. Harmon’s utility function is U(x1‚ x2) =
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ECON 339‚ September 2013 Assignment 1 Economics 339 (A01) 2013 Assignment 1 L. Welling September 18‚ 2013 Due: September 30‚ 2013 Total value: 25 marks Notes: 1. Assignment is due by 4:30 pm on September 30. It can be handed in be in class before then‚ or dropped into the assignment box for 339 by that time. Students are encouraged to work together on assignments‚ but must write up answers individually. 2. Please use at least one-half page for any diagram required. Marks will be
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textbook/lecture. Part B: 2 Applied problems‚ choose ONE of them 20% Note: the applied question should be answered using concise and in-depth economic reasoning. The presentation of the arguments (supported by diagrams and/or appropriate algebra) matters for the mark on this question. Advice for exam preparation: 1. Understanding The understanding of economic models and concepts takes a lot of time and independent study. The minimum to gain this understanding is to read the book chapters in Varian
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