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Discount Rate

Question1: The EPA is interested in implementing a policy to increase the
amount of "brownfield" remidiation. Each policy possesses separate benefits
listed below (attachment) over a 5 year horizon. Cost of implementation is
10 million. Which policy would you recommend with a discount rate of 20%?

(see attachment)

Question 2: Calculate the marginal utility (for x and y) and the marginal
rate of substitution for the following utility functions:

1.) U(X,Y) = 4*X^0.3Y^0.5

(i just need one done to figure it out)

Question 3: Solve the following problems using the Lagrangian optimization
criterion to determine the optimal consumption of goods x and y and utility
derived from thier consumption.

1.) U(x,y) = 8x^0.5y^0.25 Px = 4 Py = 2 I =$40

Lagrangian Formula: U(x,y) + lambda[I-PxX-PyY]

Attachments

Solution Summary

Calculate the marginal utility (for x and y) and the marginal
rate of substitution

$2.19