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Lecture

MGEA02H3 Lecture Notes - Opportunity Cost


Department
Economics for Management Studies
Course Code
MGEA02H3
Professor
all

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Opportunity*cost!(From&fall&2011&term&test&1,&question&153)&
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PPF:!Y=8(400+X2)0.5!
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Question!1!
Given!that!the!economy!is!producing!efficiently!and!has!chosen!to!produce!and!
consume!12!units!of!X!and!128!units!of!Y.!Use!calculus!to!obtain!the!opportunity*
cost*of*Y*
*
Question!2!
Given!that!the!economy!is!producing!efficiently!and!has!chosen!to!produce!and!
consume!16!units!of!X.!Use!calculus!to!obtain!the!opportunity*cost*of*X!
!
Question!3!
Suppose!that!those!in!charge!of!this!economy!want!to!maximize!the!utility!of!the!
residents!of!the!country.!Where!utility!can!be!computed!according!to!the!equation!
U=XY2.!How!many!units!of!X!are!included!in!the!set!of!X!and!Y!that!will!maximize!the!
utility!value!of!the!output!produced.!
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