EC410A-11.05

EC410A-11.05



EC410A-11.05

Part 1

Model

Data

Utilization = U = PB = Constant

Let,

P = 3

B = 4

Therefore,

U = 3 x 4 = 12

If,

P = 4

B = 3

Then,

U = 4 x 3 = 12

Therefore,

Maximum Value of P is 12

U = 12 x 1 = 12

Or,

U = P

For Optimal Level of Raw Berries,

Number of Pies = Number of Berries Available - Number of Berries Consumed

P = T - B

Therefore,

U = B ( T - B )

Either,

U = B; which, is not possible because it is the maximum amount.

Or,

U = T - B

Empirics

Russell made two assumptions, the first one is that, income is ...