] Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given...
] Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given by the utility function U(x1, x2) = x1.
Find the demand functions for the goods.
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] Consider a preference-maximising consumer who consumes two
commodities. The preferences of the consumer are given...
Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given by...
Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given by the utility function U(x1, x2) = x1. (a) Comment on the homotheticity of the consumer’s preferences.
Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given by...
Consider a preference-maximising consumer who consumes two commodities. The preferences of the consumer are given by the utility function U(x1, x2) = x1. (a) Comment on the monotonicity and convexity of the consumer’s preferences.
A preference-maximising consumer consumes two commodities. The prices of the commodities are denoted by p1 and...
A preference-maximising consumer consumes two commodities. The prices of the commodities are denoted by p1 and p2, and the consumer’s income is denoted by I. The indirect utility function of the consumer is: V (p1, p2, I) = I2/4p1(p2 − p1) . Find the underlying utility function that would have generated it.
EXERCISE 2 Consider a consumer who consumes two goods and has utility function u(x1, x2) =...
EXERCISE 2 Consider a consumer who consumes two goods and has utility function u(x1, x2) = x, + 1x1 The price of good 2 is 1, the price of good 1 is p, and income is m. Derive the ordinary demand functions of good l and good 2. For what values of p and m is: a. good l normal? b. good 2 normal? c. good 1 an ordinary good? d. good 2 a gross substitute for good 1?
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can...
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can be represented by a utility function of the form U (, x2) - 4x +2 20x1 Suppose that this consumer is a price taker who faces a finite constant per-unit price for commodity The consumer is endowed with income of y. Throughout this question you may assume one of pi 0 and a finite constant per-unit price for commodity two of p2 > 0....
please show all math work EXERCISE 3 Consider a consumer who consumes two goods and has...
please show all math work
EXERCISE 3 Consider a consumer who consumes two goods and has utility function u(x1, x2) = x2 + VX1. Income is m, the price of good 2 is 1, and the price of good 1 changes from p to (1+t)p. Compute the compensating variation, the equivalent variation, and the change in consumer's surplus for a change in the price of good 1, holding income and the price of good 2 fixed.
A consumer only consumes two commodities, x1 and x2. If x2 is an inferior good, and...
A consumer only consumes two commodities, x1 and x2. If x2 is an inferior good, and if p1 goes up, do the resulting Income and Substitution Effect on good 2 work in the same direction as each other, or in opposite directions of each other?
A consumer only consumes two commodities, x1 and x2. If x2 is an inferior good, and...
A consumer only consumes two commodities, x1 and x2. If x2 is an inferior good, and if p1 rises, do the resulting income and substitution effects on good 2 work in the same direction as each other, or in opposite directions from each other?
2. (25%) Consider a consumer with preferences represented by the utility function: u(x1, x2) = min...
2. (25%) Consider a consumer with preferences represented by the utility function: u(x1, x2) = min {axı, bx2} If the income of the consumer is w > 0 and the prices are p1 > 0 and P2 > 0. (a) Derive the Marshallian demands. Be sure to show all your work. (b) Derive the indirect utility function. (c) Does the utility function: û(x1, x2) = axı + bx2 represent the same preferences?
4. General Equilibrium An economy consists of two consumers, indexed by j = A, B, who...
4. General Equilibrium An economy consists of two consumers, indexed by j = A, B, who consume two goods x, and x2. The first consumer's endowment of the two goods is (W1,W4) = (2,4), and the second consumer's endowment is (w,w) = (5,1), where w/ denotes consumer j's endowment of good i. a. Suppose the preferences of the two consumers are described by the utility functions U,(x) = (x^)(x4)4 and U2(x) = xPx, where x denotes consumer j's consumption of...
EXERCISE 2 Consider a consumer who consumes two goods and has utility function u(x1, x2) = x, + 1x1 The price of good 2 is 1, the price of good 1 is p, and income is m. Derive the ordinary demand functions of good l and good 2. For what values of p and m is: a. good l normal? b. good 2 normal? c. good 1 an ordinary good? d. good 2 a gross substitute for good 1?
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can be represented by a utility function of the form U (, x2) - 4x +2 20x1 Suppose that this consumer is a price taker who faces a finite constant per-unit price for commodity The consumer is endowed with income of y. Throughout this question you may assume one of pi 0 and a finite constant per-unit price for commodity two of p2 > 0....
please show all math work
EXERCISE 3 Consider a consumer who consumes two goods and has utility function u(x1, x2) = x2 + VX1. Income is m, the price of good 2 is 1, and the price of good 1 changes from p to (1+t)p. Compute the compensating variation, the equivalent variation, and the change in consumer's surplus for a change in the price of good 1, holding income and the price of good 2 fixed.
2. (25%) Consider a consumer with preferences represented by the utility function: u(x1, x2) = min {axı, bx2} If the income of the consumer is w > 0 and the prices are p1 > 0 and P2 > 0. (a) Derive the Marshallian demands. Be sure to show all your work. (b) Derive the indirect utility function. (c) Does the utility function: û(x1, x2) = axı + bx2 represent the same preferences?
4. General Equilibrium An economy consists of two consumers, indexed by j = A, B, who consume two goods x, and x2. The first consumer's endowment of the two goods is (W1,W4) = (2,4), and the second consumer's endowment is (w,w) = (5,1), where w/ denotes consumer j's endowment of good i. a. Suppose the preferences of the two consumers are described by the utility functions U,(x) = (x^)(x4)4 and U2(x) = xPx, where x denotes consumer j's consumption of...
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