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If the consumer's budget constraint is given by 4P + 2B = 50 where P is pizza and B is burgers, the following bundles of pizza and burgers would be on the budget constraint:

P = 5; B = 10

P = 2; B = 21

P = 10; B = 20

P = 2; B = 24

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019
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Related questions

Suppose the market demand for pizza is Qd = 300-20P and the market supply of pizza is Qs= -100 + 20 P where P= price (per pizza)

a. At equilibrium how many pizzas will be bought and sold? What is the equilibrium price? Calculate elasticity of demand and supply at equilibrium

b. What would happen if the sellers set the price at $15 per pizza? Calculate price elasticity of demand and supply at this point.

Suppose the market demand for pizza is given by Qd = 300 — 20P and the market supply for pizza is given by Qs = 20P — 100, where P = price (per pizza).

a. Graph the supply and demand schedules for pizza using $5 through $15 as the value of P.

b. In equilibrium, how many pizzas would be sold and at what price?

c. What would happen if suppliers set the price of pizza at $15? Explain the market adjustment process.

d. Suppose the price of hamburgers, a substitute for pizza, doubles. This leads to a doubling of the demand for pizza. (At each price, consumers demand twice as much pizza as before.) Write the equation for the new market demand for pizza.

e. Find the new equilibrium price and quantity of pizza.

Nick's utility is given by the formula U(b,p)=4b2+4bp2+p4 where b is the quantity of beer he drinks and p is the quantity of pizza he eats.

1. Calculate Nick's marginal utility of beer and the marginal utility of pizza. Does Nick have diminishing marginal utilities?

2. Derive Nick's MRS (think of a diagram measuring pizza on the horizontal axis). What is the slope of the indifference curve at the point (10,10)?

3. Check whether Nick's indifference curves are convex.

4. Alex's utility function is given by U(b,p)= 6b+ 3p2+1.23252523423987 . Redo questions 1,2 and 3 for Alex.

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