tute2(1) - 4 One way oF modelling consumer behaviour is to...

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ECON1003 Tutorial 2 1. 1. (a) Solve the equations (i) (ii) (b) The spread of a carrot fly through an untreated crop is modelled by the equation , where Y is the weight of infected carrots in tons, t is time in days (a) Graph Y for t = 0 to 6, hence describe the spread of carrot fly during the next 6 days (b) Calculate the time taken to infect 300 tons of carrots. 2. (a) Plot the following functions (i) , (ii) (b) The demand function for a certain type of car is given by the equation , where P is in £ 000 (i) Write down the equation of, and graph, the total revenue function (ii) From the graph, estimate the number of cars sold when total revenue is at a maximum and the value of Q at which total revenue is zero. (iii) Calculate the number of cars sold when total revenue is £400 000 3 (a) Solve the following equations (i) (ii) (b) The demand and supply functions for a good are given by the equations , , respectively
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Determine the equilibrium price and quantity. Confirm your answer graphically
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Unformatted text preview: 4. One way oF modelling consumer behaviour is to think that a consumer will try to maximise their beneft or uTlity From the consumpTon bundle they buy. Let a consumer’s uTlity From consuming x1 units oF good 1 and x2 units oF good 2 is given by U = x1.x2. (x1 and x2 are greater than 0). Now consider the consumer has a uTlity oF 10. Draw the combinaTons oF x1 and x2 that can achieve this outcome. Do the same For U = 20 and U = 25. Interpret these curves. (Note, these curves are called Indi±erence Curves). What does the slope oF the indi±erence curve mean? Remember the budget constraint For a consumer is p1.x1 + p2.x2 = M, where p1 and p2 are the prices oF goods 1 and 2, and M is her income. Draw this curve on your diagram. What consumpTon bundle will the consumer choose? Interpret your result. Additonal questons: 5. QuesTon 3 on page 206-07 oF the text 6. QuesTon 5 on page 207 oF the text....
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