Peg and Al Fundy have a limited food budget, so Peg is trying to feed the family as cheaply as possible. However, she still wants to make sure her family members meet their daily nutritional requirements. Peg can buy two foods. Food 1 sells for $7 per pound and, each pound contains 3 units of vitamin A and 1 units of vitamin C. Food 2 sells for $1 per pound, and each pound contains 1 unit of each vitamin. Each day, the family needs at least 12 units of vitamin A and 6units of vitamin C.

(a) Verify that Peg should purchase 12 units of food 2 each day and thus oversatisfy the vitamin C requirement by 6 units.

(b )Al has put his foot down and demanded that Peg fulfill the family’s daily nutritional requirement exactly by obtaining precisely 12 units of vitamin A and 6 units of vitamin C. The optimal solution to new problem will involve ingesting less vitamin C, but it will be more expensive. Why?

Suppose a firm faces a fixed price of output, 푝푝= 1200. the firm hires workers from a union at a daily wage, 푤푤, to produce output according to the production function 푞푞= 2퐸퐸12. there are 225 workers in the union. any union worker who does not work for this firm is guaranteed to find nonunion employment at a wage of $96 per day. a. what is the firm’s labor demand function? b. if the firm is allowed to choose 푤푤, but then the union decides how many workers to provide (up to 225) at that wage, what wage will the firm set? how many workers will the union provide? what is the firm’s output and profit? what is the total income of the 225 union workers? c. now suppose that the union sets the wage, but the firm decides how many workers to hire at that wage (up to 225). what wage will the union set to maximize the total income of all 225 workers? how many workers will the firm hire? what is the firm’s output and profit? what is the total income of the 225 union workers? [hint: to maximize total income of union, take the first order condition with respect to w and set equal to 0.]

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)

What is one counter argument to the premise that the wealth gap is a serious problem which needs to be addressed?