The consumer's budget constraint is $6 = 0.50g + p, where g is packs of gum and p is bags of pretzels. the marginal utility of p
retzels is mup = g0.5, and the marginal utility of gum is mug = 0.5g–0.5p. the consumer's utility function is u = g0.5p. the utility-maximizing bundle consists of _____ packs of gum and _____ bags of pretzels.
The answer is 4 packs of gum and 4 sacks of pretzels .
A purchaser dependably attempts to expand his fulfillment. Be that as it may, in this interest, he is hampered by his restricted cash wage, i.e., spending plan. A spending line is characterized as the available mixes of two products, given the costs of every great and shopper's wage. Along these lines the spending imperative depicts the diverse measure of two wares that a shopper can bear. Expect that a buyer has a settled cash salary, M, to buy two merchandise, X and Y whose costs are PX and PY, individually. Likewise accept that PX and PY are settled.
b. a. Rent ceilings reduce the quantity and quality of available housing.
The disagreement between these economists is most likely due to <u>difference in values.</u>
Economists are known to disagree a lot with each other and this is down to them having different values and perspectives with regards to several economic decisions. This is why there are different economic theories subscribed to by economists such as Keynesian and New Classical theories.
Despite these disagreements however, there are certain things they would always agree on and one of those is that rent ceilings reduce the quantity and quality of available housing.
The logic behind this is that imposing a rent ceiling would dissuade real estate investors from putting in more money to develop properties because the rent ceiling would limit the returns that they can get.
Supply of real estate would also fall because less investors would go into the market because they would fear being unable to recoup adequate returns on account of the rent ceiling.