Question 1 (1 point) Suppose the consumer's utility function is given by U (1, 2) .b...
Question 2 (1 point) Suppose the consumer's utility function is given by U (x1, 2) ,where a-8.0, and b-9.0. Suppose further, the price of good 1 is 2.2, price of good 2 is 4.5 and income is 109 Finally suppose the price of good 1 has decreased to 0.2 What is the substitution effect for good 2 Round your answer to two decimal places Your Answer: Answer
Question 1 (1 point) Suppose the consumer's utility function is given by U(x1,x2)=x1ax2b , where a=7.0, and b=4.0. Suppose further, the price of good 1 is 2.6, price of good 2 is 0.5 and income is 43 Finally suppose the price of good 1 has decreased to 0.4 What is the substitution effect for good 1 and good 2? Round your answer to two decimal places Suppose the consumer's utility function is given by U(x1,x2)=x1ax2b , where a=2.0, and b=5.5....
Suppose the consumer's utility function is given by U(x1, x2) = xqxh , where a=7.0, and b=5.0. Suppose further, the price of good 1 is 1.2, price of good 2 is 0.5 and income is 53 Finally suppose the price of good 1 has decreased to 0.9 What is the substitution effect for good 1 Round your answer to two decimal places
Suppose the consumer's utility function is given by U(x1, x2) = xq x , where a=6.5, and b=4.0. Suppose further, the price of good 1 is 2.4, price of good 2 is 1.1 and income is 87 Finally suppose the price of good 1 has decreased to 0.4 What is the substitution effect for good 1 Round your answer to two decimal places Your Answer:
Please show your work and explain the steps involved. Question 1 (1 point) Suppose the consumer's utility function is given by U(X1,x2) xx ,where a-4.0, and b-3.0. Suppose further, the price of good 1 is 1.2, price of good 2 is 4.3 and income is 120 Finally suppose the price of good 1 has decreased to 0.2 What is the substitution effect for good 1 Round your answer to two decimal places Your Answer: Answer
3. Suppose a consumer's utility function is given by U(A, B) In(A)+In(B). Suppose the price of each apple (A) is €6, and the price of a loaf of bread (B) Is €6 and the consumer's income is €120 ) Write down the Lagrangian for this problem and solve for the optimal consumption of apples and (ii) Report and interpret your solution for the Lagrange multiplier. bread. i) Evaluate the marginal utility of bread and the marginal utility of apples at...
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. Suppose a consumer's utility function is given by U(A,B) In(A)+In(B). Suppose the price of each apple A) is є2, and the price of a loaf of bread (B) is є2 and the consumer's income was €40. (i) Find the marginal utility of apples and the marginal utility of bread and use these to determine if the ii) Write down the Lagrangian for this problem and solve for the optimal consumption of apples and iii) Report and interpret your solution...
Suppose that a consumer’s utility function is U=xy with MUx=y and MUy=x. Suppose the consumer‘s income is $480. For this question you may need to use the following approximations: sqrt(2) is approximately 1.4, sqrt(3) is approx. 1.7 and sqrt(5) is approx 2.2. a) Initially, the price of y is $4 and the price of x is $6. What is the consumer’s optimal bundle? b) What is the consumer's initial utility? Now suppose that price of x increases to $8 and...
5. Consumers utility, function is U(zi,T2) = xi (T2-1). Consumer's income is 30 and price of good「 is 4. Compute the Income and substitution effects for good 2 as its price decreased from 6 to 2 and the consumer shifted from consumption bundle (3;3) to (3.5;8).