can you please answer v), vi) and vii) Suppose that

FIND A SOLUTION AT Academic Writers Bay

can you please answer v), vi) and vii)
Suppose that the demand for units of some beverage comes from two types of household. They have the following utility functions representing their preferences of a household over units of the beverage (xt) and expenditure on all other goods (x2),
(Z4(x1,x2) = %i1/2%21/2 and i/B(x1,x2) = 500 ln(Xi) 4- x2
The households have exogenous incomes of IA and IB. The second good is referred to as a composite good and is an amount of money. We assume throughout that p2 = 1.
i) (6 marks) For each household type, derive the households ordinary demand functions, x1(p1,1, Z) and x2(p1# 1, Z). You can assume that both household types have enough income to reach an interior solution.
ii) (2 marks) Suppose there are 10 households of each type. Find the market demand function for the beverage.
iii) (3 marks) If the market supply is provided by 16 identical firms with cost function, C(x) = 4×2. Find the market supply function.
iv) (2 marks) Calculate the market equilibrium price and quantity in terms of the households exogenous incomes.
v) (3 marks) Suppose the exogenous incomes changed so that they became (IA 4- 100) and (IB — 100). Did aggregate income of the households change? Did the market equilibrium price and quantity change? If so, by how much?
vi) (2 marks) If we were to have a market model where the demand side was composed of 20 households of only one household type (A or B) but allowing that households have different parameters in their utility function (exponents or coefficients), ie. they are not identical, which type of household would allow the market demand to be insensitive to changes in the distribution of income (while aggregate income was fixed)? That is, show that the distribution of incomes is irrelevant to the market demand if we choose the correct preference type even when the households are not identical.
vii) (6 marks) Explain this result by illustrating the effect of a change in income for each type of household (as in v)) using an indifference curve analysis for each household.

• WE OFFER THE BEST CUSTOM PAPER WRITING SERVICES. WE HAVE DONE THIS QUESTION BEFORE, WE CAN ALSO DO IT FOR YOU.
• Assignment status: Already Solved By Our Experts
• (USA, AUS, UK & CA PhD. Writers)
• CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS

QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER

Why Choose Us?

How It Works

• Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
• Fill in your paper’s requirements in the “PAPER DETAILS” section.
• Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
• Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
• From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

About AcademicWritersBay.com

AcademicWritersBay.com is an easy-to-use and reliable service that is ready to assist you with your papers 24/7/ 365days a year. 99% of our customers are happy with their papers. Our team is efficient and will always tackle your essay needs comprehensively assuring you of excellent results. Feel free to ask them anything concerning your essay demands or Order.

AcademicWritersBay.com is a private company that offers academic support and assistance to students at all levels. Our mission is to provide proficient and high quality academic services to our highly esteemed clients. AcademicWritersBay.com is equipped with competent and proficient writers to tackle all types of your academic needs, and provide you with excellent results. Most of our writers are holders of master’s degrees or PhDs, which is an surety of excellent results to our clients. We provide assistance to students all over the world.
We provide high quality term papers, research papers, essays, proposals, theses and many others. At AcademicWritersBay.com, you can be sure of excellent grades in your assignments and final exams.