The graph presents the quantities of bananas and apples whichn Sam consumes. Sam has a total budget of $ 45 which he spends onn fruits monthly. Given the information provided by the graph,

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1. Find the prices of the two fruits. What is the slope of Sam'sn budget line?

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2. If the marginal utility of bananas is MUb=2, then what is then marginal utlity of apples MUa?

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3. If Sam eats 3 kg of apples per month, how many kilograms ofn bananas is he eating at the maximum?

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4. If the price of bananas doubles, what is the slope of his newn budget line? How many bananas does he eat when he still consumes 3n kg of apples? What has happened to his indifference curve? Does hisn consumption position improve or worsen?

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Consider a firm sells its product in two different countries. It needs to decide what quantities to be sold in Country 1 (9₁) and Country 2 (92). The inverse demand functions are p₁ = 60 - 0.5q₁ in Country 1 and p2 = 90-92 in Country 2. Then, its total revenue function will be: R(9₁,92) = R₁ (9₁) + R₂ (92) = (60-0.5q₁)91 + (90-92)92 = 60q1 -0.5q² +90qz-q² Suppose the firm has a constant per unit cost of c = 10, regardless of the country where the goods are sold. So, its total cost function is given by C(q91, 92) = 10(91 +92). Therefore, the firm's profit function is (9₁, 92) = R(9₁, 92) - C(9₁,92) = 50q₁ -0.5q? +8092 - 9² The firm's problem is to choose the optimal output levels in each country (q₁,92), that maximizes its total profit. (a) Treat q₁ and 92 as the relevant decision variables, create a spreadsheet to model this optimization decision. Make sure you input the relevant formulae for the relevant cells for pri total revenue, total cost and profit (i.e. C6 to C8; C11 and C13 in my following illustration). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 A B Quantity 1 (Country 1) Quantity 2 (Country 2) Multi-Market profit maximization problem Price 1 (Country 1) Price 2 (Country 2) Total Revenue Unit Cost Total Cost Profit C D Consider a firm sells its product in two different countries. It needs to decide what quantities to be sold in Country 1 (9₁) and Country 2 (92). The inverse demand functions are p₁ = 60 - 0.5q₁ in Country 1 and p2 = 90-92 in Country 2. Then, its total revenue function will be: R(9₁,92) = R₁ (9₁) + R₂ (92) = (60-0.5q₁)91 + (90-92)92 = 60q1 -0.5q² +90qz-q² Suppose the firm has a constant per unit cost of c = 10, regardless of the country where the goods are sold. So, its total cost function is given by C(q91, 92) = 10(91 +92). Therefore, the firm's profit function is (9₁, 92) = R(9₁, 92) - C(9₁,92) = 50q₁ -0.5q? +8092 - 9² The firm's problem is to choose the optimal output levels in each country (q₁,92), that maximizes its total profit. (a) Treat q₁ and 92 as the relevant decision variables, create a spreadsheet to model this optimization decision. Make sure you input the relevant formulae for the relevant cells for pri total revenue, total cost and profit (i.e. C6 to C8; C11 and C13 in my following illustration). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 A B Quantity 1 (Country 1) Quantity 2 (Country 2) Multi-Market profit maximization problem Price 1 (Country 1) Price 2 (Country 2) Total Revenue Unit Cost Total Cost Profit C D

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