Economics: Microeconomics Study Material with Solved Assignments

Running head: ECONOMICS
Economics
Name of the student
Name of the university
Author note

2
ECONOMICS
Table of Contents
Answer 1....................................................................................................................................3
Answer a)...................................................................................................................................5
Answer b)...................................................................................................................................5
Answer c)...................................................................................................................................6
Answer 2....................................................................................................................................7
Answer a.....................................................................................................................................7
Answer b....................................................................................................................................8
Answer c.....................................................................................................................................8
Answer d....................................................................................................................................8
Answer e.....................................................................................................................................8
Answer f.....................................................................................................................................8
Answer 3....................................................................................................................................9
Reference list............................................................................................................................11

3
ECONOMICS
Answer 1
U ( wB , wS ) =wB
2/ 3 wS
1/ 3
given his budget constraint
pB wB + pS wS ≤ I
M wB= du
d wB
=2
3 wB
2
3 −1
wS
1 /3
M wS= du
d wS❑
= 1
3 wB
2
3 wS
1
3 −1
M wB
M wS
= 2 wS
1 /3
3 wB
1/ 3 ÷ 1 wB
2
3
3 wS
2/3
M wB
M wS
= 2 wS
wB
Given,

4
ECONOMICS
Price of wB= £20 and price of wS is £8
As,
M wB
M wS
= P wB
P wS
M wB
M wS
= 2 wS
wB
=20
8
wS = 5
4 wB
Here income is given as I,
Therefore inserting this equation in
pB wB + pS wS ≤ I
We get
20wB + 8 ( 5
4 wB) = I (since, wS =¿ 5/4wB)
20wB + 10wB =I
wB =I /30