How much does Nordhaus's rho of p = 0.015 discount utility for the generation living 28 years from now in comparison to the generation living today? a) 0% b) 22 % c) 66% d) 90.6%
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- Suppose a household has the following lifetime utility function: U=c1/2 + ẞc¹/2 12tt+1 A) Find expressions for the partial derivatives of lifetime utility, U, with respect to period t and period t + 1 consumption. Is marginal utility of consumption in both periods always positive? B) Find expressions for the second derivatives of lifetime utility with respect to period t and t+1 consumption, i.e., 2U and a 20_Are these second derivatives always negative for ac²²+1 any positive values of period t and t+1 consumption? C) Derive an expression for the indifference curve associated with lifetime utility level Uo (i.e., derive an expression for C++₁ as a function of U₁ and c). What is the slope of the indifference curve? How does the magnitude of the slope vary with the value of c?6. If intertemporal preferences are consistent and the lifetime utility function is additive, then the discount function 8(t) must be (a) bounded (b) exponential (c) hyperbolic (d) linear (e) logarithmicIf a person lives for 3 years with a disease and the current standard of care for that disease means he/she lives with a utility level of 0.7.-What is the QALY? Answer in not less than 300 words
- Exercise 1 A consumer's utility function is u(x, y) = x²y³ and the budget constraint is prx +Pyy ≤ w, where the parameters pr, Py and we are all strictly positive. (a) Solve the consumer's utility maximization problem. (b) Use the envelope theorem to estimate the change in the indirect utility function (i.e., the problem's value function) when the price py is changed to py + e, with e > 0.True or False:(a) If a consumer spends her entire income, then she has a strictly monotone utility function. (b)The condition that ‘the marginal rates of substitution equal the ratio of prices’ is necessary but not sufficient for a given bundle to be a Walrasian demand. (c) If U, V: R2 → R are such that U is a strictly increasing transformation of V then U and V must represent the same preferences. (d) If the substitution effect is negative (in response to a price increase) then we know the Walrasian demand for the good in question (in response to the same price increase) will also be negative. (e) A consumer’s utility is continuous and strictly monotone and when prices are given by p and income is I her Walrasian demand yields a utility of 7. Then, any bundle that yields a utility of at least 8 must cost more than I.Joko is a university student, working part-time at copying service center for Rp. 8/hour with zero non-labor income. (a) Graph Joko’s budget constraint and label the utility-maximing outcome if Joko opts to work 40 hours per week. (b) Suppose Joko’s parents decide to send him Rp.100/week. Graph Joko’s new budget constraint. (c) How many hours will Joko now have to work to maintain the same weekly income as in (a)?
- Suppose treatment for traumatic brain injuries allows treated children to live an additional 25 years with an average utility or QALY weight of .65. Draw a QALY graph and indicate the QALY's gained from treatment both without discounting and discounting using a 3% rate.Pls help with below homework. Select the correct option and explain it in 7-8 sentences. Question 3.0)Q6 (a) Mr Jones has utility function U(A,B)= AB. He loses b bananas, reducing his banana holding to B - b. How many extra apples a will he need as compensation, to restore him to his former level of utility?
- For a certain Utility function, which is a simple sifted parabolic equation, the maximum utility is 10 for n=5. Determine the mathematical expression of this Utility function. Hint: look up (h,k) values for a parabola. Multiple Choice 10n + 5 10n + 5n - 2n2 +10n + 5 - (n-5)2+10Suppose Jimi has reference dependent preferences over guitars and money as in Tversky and Kahneman (1991). His utility functions are given below. Gains Gains 400 -2 -2 2 Guitars 2$ Losses Losses i-600 -2 What is the least amount of money Jimi is willing to accept to sell one of his guitars? (just enter a dollar amount, i.e., "10o0", not "$1000"The utility function and the prices are the following: U = 51 x1 + 23x2 P1-5, P2-20 and 1=3157 What is the optimal amount of x2?