Please refer attached file for complete question. Graph is missing here.

1. In the following diagram, we show one of Jane's indifference curves and her budget line.

a. If the price of good X is $100, what is her income?
b. What is the equation for her budget line?
c. What is the slope of the budget line?
d. What is the price of good Y?
e. What is her marginal rate of substitution in equilibrium?

2. The Johnson Robot Company's marketing officials report to the company's CEO that the demand curve for the company's robots in 2004 is

P= 3,000 - 40Q

Where p is the price of a robot and Q is the number sold per month.

a. Derive the marginal revenue curve for the firm
b. At what prices is the demand for the firm's product price elastic?
c. If the firm wants to maximize its dollar sales volume, what price should it charge?

1 a.If the price of good X is $100, what is her income?
We find that budget line intersects axis for Good X at 40. It means that maximum amount of Good X (when Good Y=0) that can be bought with income is 40.
Income=40*100=$4000

b.What is the equation for her budget line?
We are given two points (80,0) and (0,40) on budget line, so equation of line will ...

Solution Summary

There are two questions. Solution to first problem describes the methodology to find out equation/slope of budget line, price and Marginal rate of substitution. Solution to second problem derives marginal revenue function and revenue maximizing price level. It also deremines the price range where demand is price elastic.

Indifference Curves, Utility Maximizing Conditions, and Demand Curves. 1. Using Indifference Curve and Budget Line analysis, graphically demonstrate the ...

Using the Demand Curve and the Utility-Maximizung Rule. ... Now, overlay several indifference curves onto the picture. What are these curves? What is their shape? ...

... ii) Prove that indifference curves cannot cross. ... supply of apartments is given by Qs=500+75(P), and demand by Qd ... What is the new quantity supplied and demanded? ...

... (% Change in Quantity Demanded) = [[QDemand(NEW ... www.bized.ac.uk/educators/ he/pearson/models/indifference.ppt. ... and analyze the arc elasticity of demand is offered ...

... For a downward sloping demand curve, elasticity varies ... decrease in price, demand increases by 2 ...Indifference curves, industry concentration, and Kodak's market ...

... quantity demanded change by 4% ((130-125)/125 ... Then Income elasticity of demand = 4%/5% = 0.8. The expert examines budget constraint and indifference curve. ...

... resulting from a one percent change in quantity demanded. ... in the short run because demand is highly ... of the following is true about indifference curve where one ...

... represented by the downward slopping demand curve D. As ... wage rate increases the quantity demanded for labor ... U2 and U3 represent the indifference curves for the ...

... Along one of Jan's indifference curves, as she increases her ... leads to a fall in quantity demanded (the Law ... If the elasticity demand curve were zero (ie vertical ...