(Solved):Verizon spends millions of dollars each year on advertising for many different purposes. Provide an example of how it might design an informative ad, a persuasive ad, and a reminder ad. In what sta… View Answer

Verizon spends millions of dollars each year on advertising for many different purposes. Provide an example of how it might design an informative ad, a persuasive ad, and a reminder ad. In what stage of the product life cycle might we find an informative, persuasive, and reminder ad?

(Solved):Consider two goods, x_1 = oatmeal raisin cookies and x_2 = composite good. Assume oatmeal raisin cookies are a normal good. And assume that the consumer faces the standard budget line, p_1 x_1 + p_… View Answer

Consider two goods, x1=x1= oatmeal raisin cookies and x2=x2= composite good. Assume oatmeal raisin cookies are a normal good. And assume that the consumer faces the standard budget line, p1x1+p2x2=mp1x1+p2x2=m (you may set p2=1p2=1 if you want).

A) Suddenly the price of oatmeal raisin cookies skyrockets, and increases from p1p1 to ¯p1p1¯. After this price change, which will be larger: x1(p1,p2,m)x1(p1,p2,m) or x1(¯p1,p2,m)x1(p1¯,p2,m)?

B) Will Δxs1Δx1s be positive or negative? Will Δxn1Δx1n be positive or negative?

C) Decompose this price change using the Hicksian decomposition. To do this, show the following in a graph: the original, new, and (Hicksian) hypothetical budget lines, optimal bundles, and utility curves. Also draw arrows indicating the magnitude and direction of the income, substitution, and total effects. Be sure to label the axes and horizontal intercepts of all 3 budget lines.

(Solved):According to situational influences on consumer behavior, which of the following tops the list of ways consumers use their mobile phones in stores? a. price checks and comparisons b. scan a QR code… View Answer

According to situational influences on consumer behavior, which of the following tops the list of ways consumers use their mobile phones in stores?

a. price checks and comparisons

b. scan a QR code

c. research products or product information

d. access specific retailer app e. access or download digital coupons

(Solved):Suppose there is a shift in the representative consumer’s preference, namely, the consumer prefers, given the market real interest rate, to consume less current Leisure and more current consumption… View Answer

Suppose there is a shift in the representative consumer’s preference, namely, the consumer prefers, given the market real interest rate, to consume less current Leisure and more current consumption goods.

Determine the effect of this on current aggregate output, current employment, the current real wage, current consumption, and current investment. Explain your results by referring to possible shifts in the curves describing the labour market equilibrium and the goods market equilibrium

(Solved):Assume that Carson has two choices to satisfy the increased demand for its products. It could increase production by 10 percent with its existing facilities by obtaining short-term financing to cov… View Answer

Assume that Carson has two choices to satisfy the increased demand for its products. It could increase production by 10 percent with its existing facilities by obtaining short-term financing to cover the extra production expense and then using a portion of the revenue received to finance this level of production in the future. Alternatively, it could issue bonds and use the proceeds to buy a larger facility that would allow for 50 percent more capacity. Which alternative should Carson select?

(Solved):Armando’s preferences over goods can be represented by the following utility function: Armando faces prices and has income a. Find Armados’s Marshallian demand functions, View Answer

Armando’s preferences over goods x=(x1,x2)x=(x1,x2) can be represented by the following utility function:

u(x)=ln(x1−b)+ln(x2)u(x)=ln(x1−b)+ln(x2)

Armando faces prices p=(p1,p2)>>0p=(p1,p2)>>0 and has income m>p1b>0m>p1b>0.

a. Find Armados’s Marshallian demand functions, x1(p,m)x1(p,m) and x2(p,m)x2(p,m). Why is it important that m>p1bm>p1b? What is the interpretations of the coefficient b? Do the demand functions satisfy the relevant homogeneity conditions? Derive the indirect utility function v(p,w)v(p,w).

b. Using your results from part (a), show that the expenditure function is

e(p,u)=2eu/2p1/21p1/22+bp1e(p,u)=2eu/2p11/2p21/2+bp1

From the expenditure function, derive the Hicksian demand functions h1(p,u)h1(p,u) and h2(p,u)h2(p,u). Do the Hicksian demand functions satisfy their relevant homogeneity conditions??