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4. When prices are (p1,P2) (2,1) a consumer demands (xi, r2)-(1,2), and when prices are T1,...
3. When prices are (p1,P2) (1,2) a consumer demands (xi, 2) (1,2), and when prices are...
3. When prices are (p1,P2) (1,2) a consumer demands (xi, 2) (1,2), and when prices are (p1,P2) (2,1) the consumer demands (x1,x2)-(2,1). Is this behavior consistent with the model of utility maximization?
A consumer is observed to purchase X1 = 20, X2 = 10 at prices P1 =...
A consumer is observed to purchase X1 = 20, X2 = 10 at prices P1 = 2, and P2 = 6. She is also observed to purchase X1 = 18, X2 = 4 at prices P1= 3, P2= 5. Is her behavior consistent with the axioms of the theory of revealed preference?
This table contains prices and the demands of a consumer whose behavior was observed in 5...
This table contains prices and the demands of a consumer whose behavior was observed in 5 different price-income situations. Situation P1 P2 X1 X2 A 2 2 10 70 B 2 4 70 20 C 2 2 20 30 D 6 2 10 30 E 2 4 20 20 A. Sketch each of his budget lines and label the point chosen in each case by the letters A, B, C, D, and E. B. Is the consumer’s behavior consistent with...
A consumer has income M, and faces prices (for goods 1 and 2) p1 and p2....
A consumer has income M, and faces prices (for goods 1 and 2) p1 and p2. For each of the following utility functions, graphically show the following: (i) the Slutsky substitution and income e⁄ects when p1 decreases. (ii) the Hicks substitution and income e⁄ects when p1 decreases. (iii) the Marshallian and Hicksian demand curves for good 1: (a) perfect complements: U(x1 , x2) = min {4x1, 5x2} (b) quasi-linear: U(x1 , x2) = x^2/3 1 + x2
3. There are two goods, Xi and X2 with prices pı > 0 and P2 =...
3. There are two goods, Xi and X2 with prices pı > 0 and P2 = 1. Assume that a consumer has income I> 0 that she will allocate for the bundle (X1, X2), and has preferences represented by the utility function u(X1, X2) = a ln x1 + x2, for some a > 0. (a.) Derive the marginal utilities and bang-for-bucks for each good. (b.) Find the optimal bundle assuming an interior solution, i.e. x > 0 and x...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m. 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods. For each of your answers in question 2, write down the consumer...
Each firm produces both goods, i.e., good 1 and good 2. Each firm takes the market prices p 0 and p2 2 0 as firm produc...
Each firm produces both goods, i.e., good 1 and good 2. Each firm takes the market prices p 0 and p2 2 0 as firm produces T units of good 1 and x2 units of good 2, with (xi, x2) the total costs of C(x.x) = 2i+0.5«% given and chooses output to maximize profits.1 If a R2, it has 1200 (a) (1 point ) For given prices p1 and p2, find the revenue, R(x1, x2), of a single firm (b)...
6. Suppose prices are given by pı 2 and p2 -4. Which of the following consumption...
6. Suppose prices are given by pı 2 and p2 -4. Which of the following consumption patterns are consistent with the assumption that the consumer chooses the consumption bundle that he prefers the most among those affordable if his preferences are non-satiated ("more-is-better") and strictly convex? (a) If m 10, he consumes (2,1). If m 14, he consumes (3,2) (b) If m = 12, he consumes (c) If m 12, he consumes (2,2) (d) If m 10, he consumes (1,2)....
5. Suppose that each consumer has the Cobb-Douglas utility function u:(X1i, X2i) X11 X21-4. In addition...
5. Suppose that each consumer has the Cobb-Douglas utility function u:(X1i, X2i) X11 X21-4. In addition the endowments are wi=(1,2) and w2=(2,1). What should be the vector of prices (pı", p2') in order to achieve equilibrium (supply-demand). [Note use an increasing transformation of the utility functions given by a In Xii+(1-a) In X2i] . . following utility functions:
Question2 a) A consumer has utility function U(zi,x2)-min{x2 + 4x1,T1 + 4n). i . Draw the...
Question2 a) A consumer has utility function U(zi,x2)-min{x2 + 4x1,T1 + 4n). i . Draw the indifference curve for U(ri, ra) = 20 and shade the area where U(ri,22)2 20 2. For what value of /wll the unique optimum feature - 3. For what value of P1/P2 will the unique optimum feature#2-0. 4. If neither nor is equal to zero, and the optimum is unique, what must be the value of a1/r2?
3. When prices are (p1,P2) (1,2) a consumer demands (xi, 2) (1,2), and when prices are (p1,P2) (2,1) the consumer demands (x1,x2)-(2,1). Is this behavior consistent with the model of utility maximization?
3. There are two goods, Xi and X2 with prices pı > 0 and P2 = 1. Assume that a consumer has income I> 0 that she will allocate for the bundle (X1, X2), and has preferences represented by the utility function u(X1, X2) = a ln x1 + x2, for some a > 0. (a.) Derive the marginal utilities and bang-for-bucks for each good. (b.) Find the optimal bundle assuming an interior solution, i.e. x > 0 and x...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m. 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods. For each of your answers in question 2, write down the consumer...
Each firm produces both goods, i.e., good 1 and good 2. Each firm takes the market prices p 0 and p2 2 0 as firm produces T units of good 1 and x2 units of good 2, with (xi, x2) the total costs of C(x.x) = 2i+0.5«% given and chooses output to maximize profits.1 If a R2, it has 1200 (a) (1 point ) For given prices p1 and p2, find the revenue, R(x1, x2), of a single firm (b)...
6. Suppose prices are given by pı 2 and p2 -4. Which of the following consumption patterns are consistent with the assumption that the consumer chooses the consumption bundle that he prefers the most among those affordable if his preferences are non-satiated ("more-is-better") and strictly convex? (a) If m 10, he consumes (2,1). If m 14, he consumes (3,2) (b) If m = 12, he consumes (c) If m 12, he consumes (2,2) (d) If m 10, he consumes (1,2)....
5. Suppose that each consumer has the Cobb-Douglas utility function u:(X1i, X2i) X11 X21-4. In addition the endowments are wi=(1,2) and w2=(2,1). What should be the vector of prices (pı", p2') in order to achieve equilibrium (supply-demand). [Note use an increasing transformation of the utility functions given by a In Xii+(1-a) In X2i] . . following utility functions:
Question2 a) A consumer has utility function U(zi,x2)-min{x2 + 4x1,T1 + 4n). i . Draw the indifference curve for U(ri, ra) = 20 and shade the area where U(ri,22)2 20 2. For what value of /wll the unique optimum feature - 3. For what value of P1/P2 will the unique optimum feature#2-0. 4. If neither nor is equal to zero, and the optimum is unique, what must be the value of a1/r2?
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