ProblemSet2ESP168aFall10

# ProblemSet2ESP168aFall10 - October 26, 2010 (due November...

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October 26, 2010 (due November 9, 2010) Problem Set 2 ESP 168a: Multi-attribute problems, Cost Benefit Analysis, Present Value Arithmetic 1. Define the marginal rate of substitution, and the marginal rate of transformation. Discuss why the optimal choice is found when the Marginal rate of transformation= Marginal rate of substitution. Show this graphically. 2. A high school jazz band is made up of 20 seniors, 5 juniors and 20 sophomores. There is space for a maximum of 45 band members. The junior high jazz band has 15 9 th graders, 15 8 th graders and 15 7 th graders. You have to be in the junior high band to get into the high school band, and you get one chance to try out when you enter 10 th grade. How will the number of high school band members vary over time? a) assuming that each junior high grade has 15 band members in future years, b) if the junior high teacher recruits new 7 th grade band members equal to the number of graduating 9 th graders who are accepted into the high school band. Is there are equilibrium number of high school band members for cases a) and b)?

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## This note was uploaded on 12/15/2010 for the course ESP ESP 168A taught by Professor Ogden during the Fall '10 term at UC Davis.

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ProblemSet2ESP168aFall10 - October 26, 2010 (due November...

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