Homework Sourseplease show me the steps very appreciated Question 15 3 pts
please show me the steps. very appreciated!
Question 15 3 pts The Anteater Family can spend its money on education (e) or other goods (g). The family\'s utility over e and g is given by 0.5 0.5 The Anteaters have income of $50,000 to spend on e and g each year. Assume there is no public education system; the only option is to send their children to private school. Assume the price per unit (e.g., per hour) of private education is $20, and the price per unit of other goods is $20. The number of units of private education the Anteaters optimally consume is units (enter only a number in the blank, and please round to the first decimal place if necessary). Question 16 3 pts As in question 15, the Anteater Family can spend its money on education (e) or other goods (g). The family\'s utility over e and g is given by 0.5 0.5 e, 9 The Anteaters have income of $50,000 to spend on e and g each year. Assume there is no public education system; the only option is to send their children to private school. However, now the government subsidizes private education for families like the Anteaters, such that the price per unit (e.g., per hour) of private education is $10 (instead of $20). Assume the price per unit of other goods is still $20. The number of units of private education the Anteaters optimally consume with the subsidy is units (enter only a number in the blank, and please round to the first decimal place if necessary).Solution
15
We will equate the MRS = Pe/Pg
MRS = 0.5e-0.5g0.5/0.5e0.5g-0.5 =g/e
At equilibrium g/e = 20/20. This gives g= e
Using the budget constraint
20e + 20g = 50000. Put e=g.
40e =50000, solving for e gives e =50000/40.
Private education consumed is e = 1250
16
We will equate the MRS = Pe/Pg
MRS = 0.5e-0.5g0.5/0.5e0.5g-0.5 =g/e
At equilibrium g/e = 10/20. This gives 2g= e
Using the budget constraint
10e + 20g = 50000. Put e=g.
40g =50000, solving for g gives g =50000/40.
Private education consumed is e = 2*1250 =2500
