Problem Set1

# Problem Set1 - BPUB250 Problem Set1 Due January 25-26 2012...

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BPUB250 Problem Set1 Due: January 25-26, 2012 in Class Question 1 Last Friday recitation, we looked at an example of "Maximizing a rectangular area having perimeter 24 feet". How can this be extended if we have three variables? Monica has 24 hours to spend on doing Bpub250 problems (B hours), socializing (S hours), or napping (N hours). Her objective is to have her utility U=B²SN be as large as possible. Formally (mathematically) state Monica's optimization problem. How many hours should she spend on each activity? What is the highest product (U=B²SN) she can attain? Question 2 The Burrito sellers in University City have a market supply function of Q s =65P-250 , where Q s is the number of burritos produced. Wharton students’ initial demand for burritos is given by Q d = 125-10P+I, where I represents Wharton students’ income. The market for burritos is perfectly competitive. (a) Solve for the equilibrium price and quantity of burritos as a function of income. (b)

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Problem Set1 - BPUB250 Problem Set1 Due January 25-26 2012...

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