Please answer these questions correctly, I need to know this for an upcoming exa
ID: 1255008 • Letter: P
Question
Please answer these questions correctly, I need to know this for an upcoming exam.
6. Suppose that you can hire your mechanic for up to six hours. The total benefit and total cost functions are B(H) = 300H - 20H2 and C(H) = 55H + 60H2. The corresponding formulas for marginal benefit and marginal cost are MB(H) = 300 - 40H and MC(H) = 55 + 120H. How many hours should you hire your mechanic?
A. 1.53 Hours
B. 0.65 Hours
C. 6 Hours
D. 0 Hours
A. 10 CDs and 30 Books
B. 30 CDs and 10 Books
C. 20 CDs and 15 Books
D. 15 CDs and 30 Books
A. The effect of an compensated price change = the substitution effect of the price change + the
income effect of the price change
B. The effect of an uncompensated price change = the substitution effect of the price change - the
income effect of the price change
C. The effect of an uncompensated price change = the income effect of the price change -the
substitution effect of the price change
D. The effect of an uncompensated price change = the substitution effect of the price change +
the income effect of the price change
Explanation / Answer
6. Suppose that you can hire your mechanic for up to six hours. The total benefit and total cost functions are B(H) = 300H - 20H2 and C(H) = 55H + 60H2. The corresponding formulas for marginal benefit and marginal cost are MB(H) = 300 - 40H and MC(H) = 55 + 120H. How many hours should you hire your mechanic? A. 1.53 Hours 7. Teresa consumes both steak and lobster. Suppose the formula for her indifference curves is S = U - 1.5L, where S stands for the number of steaks, L stands for the number of lobsters and U represents utility. Which of the following bundles would Teresa prefer? B. 9 steaks and 5 lobsters 8. Suppose a consumer's MRS is given by the formula MRSPT = T/P, where P stands for the number of pieces of pizza and T stands for the number of tacos. Starting at 12 tacos and 4 pizzas, the consumer must receive A. 3 tacos to compensate them for the loss of one piece of pizza 9. Mike's income is $450 per month. He spends all of it on books (B) and CDs (C). Books cost $10 and CD's cost $15. His preferences correspond to the utility function U(B,C) = BxC. For that utility function, the marginal benefit of books is C and the marginal benefit of CDs is B. How many books and how many CDs will he purchase in a month? A. 10 CDs and 30 Books 10. Which of the following statements is true? B. The effect of an uncompensated price change = the substitution effect of the price change - the income effect of the price change