There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y) = xy. Donna’s utility function is U(x, y) = x 2 y. Income of Jim is mJ = 100 and income of Donna is mD = 150.
a) Find optimal baskets of Jim and Donna when price of y is Py = 1 and price of x is P. (PREVIOUSLY POSTED)
b) On separate graphs plot Jim’s and Donna’s demand schedule for x for all values of P. (PREVIOUSLY POSTED)
c) Compute and plot aggregate demand when Jim and Donna are the only consumers.
There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y)...
There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y) = xy. Donna’s utility function is U(x, y) = x 2 y. Income of Jim is mJ = 100 and income of Donna is mD = 150. a) Find optimal baskets of Jim and Donna when price of y is Py = 1 and price of x is P. (PREVIOUSLY POSTED) b) On separate graphs plot Jim’s and Donna’s demand schedule for x for...
There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y) = xy. Donna’s utility function is U(x, y) = x 2 y. Income of Jim is mJ = 100 and income of Donna is mD = 150. a) Find optimal baskets of Jim and Donna when price of y is Py = 1 and price of x is P. (PREVIOUSLY POSTED) b) On separate graphs plot Jim’s and Donna’s demand schedule for x for...
There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y) = xy. Donna’s utility function is U(x, y) = x 2 y. Income of Jim is mJ = 100 and income of Donna is mD = 150. a) Find optimal baskets of Jim and Donna when price of y is Py = 1 and price of x is P.
Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is U(x,y) = xy and Donna’s utility function is U(x,y) = x2y where x is strawberries and y is chocolate. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2. Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4?
Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is U(x,y) = xy and Donna’s utility function is U(x,y) = x2y where x is strawberries and y is chocolate. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2. Jim’s income is $100, and Donna’s income is $150. Are strawberries a normal good or an inferior good for Jim? Explain your answer.
Problem 1 (10pts) Jim's utility function is U (x, y) = xy. Jerry's utility function is U (x,y) = 1,000xy +2,000. Tammy's utility function is U2, y) = xy(1 - xy). Bob's utility function is U(x,y) = -1/(10+ 2xy). Mark's utility function is U (2,y) = x(y + 1,000). Pat's utility function is U (2,y) = 0.5cy - 10,000. Billy's utility function is U (x,y) = x/y. Francis' utility function is U (x,y) = -ry. a. Who has the same...
A consumer's preferences are given by the following utility function: u(x,y) = xy Assume Pold = 1, Py = 1, and I = 8. a. Solve for the Marshallian demand functions of x and y (your answer should have numbers, not variables. You should round your answers to three decimal places): * old 4 y = 4 b. What is the utility associated with these demands, prices, and income? u = 16 c. Suppose the price of x rises to...
3) A consumer's utility function is u(x,y)22 (a) Find the consumer's optimal choice for x, y as functions of income I and (b) Sketch the demand curves for x, y as functions of income I when prices prices pa,Py. (Be careful!) are p 16,Py 2. (Be careful!)
Consider a customer (i) with a utility function u(x, y) = 200x − 25x2 + y where the price of good x is $p, and the price of the composite good y is one dollar ($1). Also, assume that each consumer has an income I. (MUx=200-50x , and MUy=1) Derive the consumer's demand function for good x. Now, consider an economy with 100 exact same type of consumers. Calculate an aggregate demand for only good x. Now, consider a firm...
Suppose that a consumer’s utility function is U(x,y)=xy+10y. the marginal utilities for this utility function are MUx=y and MUy=x+10. The price of x is Px and the price of y is Py, with both prices positive. The consumer has income I. (this problem shows that an optimal consumption choice need not be interior, and may be at a corner point.) Assume first that we are at an interior optimum. Show that the demand schedule for x can be written as...