Hannah's utility is Uh =
3T+4C --> This means she is indifferent between having 21 Tea or 15.75 Coffe.
Proof: Uh = 3*(21)+4*(0) = 63
Uh = 3*(0)+4*(15.75) = 63
If you then connect the points, you can use the slope and your Triangular/Ruler to add some more lines, since its all the same slope.
Can someone help me with this question?
Ann’s demand function is P = 50 – 0.5Q and Bob’s demand function is P = 100 – Q. The supply function is P = 2Q/3.
Assume that Q is a private good. What are the equilibrium price and quantity? How much does Ann consume in the equilibrium and how much does Bob consume? How does Ann value the good in the equilibrium and how much does Bob value it (i.e., what are their marginal benefits)? Is the equilibrium quantity efficient?
Assume now that Q is a public good. What is the efficient quantity? If the efficient quantity is produced, then how much does Ann consume and how much does Bob consume? If the efficient quantity is produced, then how does Ann value the good and how does Bob value it (i.e., what are their marginal benefits)?
Assume again that Q is a public good. How many units will Bob buy of the good if there are initially zero units. Call this quantity QB. How many additional units will Ann buy if Bob already bought QB? Will the efficient quantity be reached?