11. Suppose u(x,y) = x"t y®, for α Ε (0, 1) (a) Draw an indifference curve...
Q1. Suppose consumer consumes two goods, X and Y. The price of X is P x , price of Y is P Y and the consumer income is m. a. Derive and interpret the budget constraint and its slope. b. If slope is -3, how will you interpret it? c. Suppose a government wants to discourage the excessive consumption of X and decides to impose a tax t 1 if someone consume more than X 1 but less than X...
Suppose an indifference curve is given by the equation U=2*C*T. Assume that initially the consumer owns the bundle C = 20, T = 2. What is the Utility value along this indifference curve? Show your calculations! Other than point, (C, T) = (20, 2), list 3 other points on this indifference curve. Graph the indifference curve including the point (C, T) = (20, 2) and the 3 points you listed in part b. Place T on the vertical axis and...
A) Suppose U = min[X, 3Y] and I=12, Px=1 and Py=5. Find X* and Y*. B) Draw an indifference curve and a normal linear budget constraint such that there is a tangency point (where MRS= price ratio) that is not the optimal bundle. C) Suppose U=X∙Y5. Find X* and Y*. D) Suppose U = 5∙X + 2∙Y and I=12, Px=2 and Py=1. Find X* and Y*.
(1 point) Suppose that you have two consumption choices: good X, and good Y. An indifference curve is the set of consumption choices with a CONSTANT utility. For example if consuming 10X and 6Y gives me the same utility as consuming 11X and 5Y, then these are both points on the same indifference curve. An indifference map is the set of all indifference curves with EVERY given utility. Consider the indifference map given by: U = XY, where U is...
Consider a utility function u(x,y) = Xayb, where 0くaく1 and 0 < b 〈 1. Also assume that x,y>0 7.1. Derive the marginal utility of x and the marginal utility of y and state whether or not the assumption that more is better is satisfied for both goods. 7.2. Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x?What does it mean in words? 7.3. What is MRS.y? 7.4. Suppose a, b- Wht...
Question 6 (Utility). Suppose a consumer's utility function is given by U(x, x)=x7x2 Draw an indifference curve with a value of 10 and an indifference curve with a value of 16. Label two points on each indifference curve as well as the axes. a) b) What is the marginal utility with respect to xi? What is the marginal utility with respect to x? What is the
show work please 6. Given an indifference curve U. = 100 = F S (F>O and S>0) of the indifference a) Use the implicit function rule to derive the slope curve. b) At S = 144, Calculate the slope.
1. Clara's utility function is U(X,Y)= (x + 2)(Y +1). a) Write an equation for Clara's indifference curve that goes through the point(X,Y)-(2,8). b) Suppose that the price of each good is one and that Clara has an income of 11. Write an equation that describes her budget constraint. c) Find an equation the describes Clara's MRS for any given commodity bundle (X,Y). d) Use the equations in parts b) and e) to solve for Clara's optimal bundle Hint use...
3. Suppose the utility function for two goods, x and y, is: U = U(x,y) = xłyż. a. Graph the indifference curve for U = 10. b. If x = 5, what must y equal to be on the U = 10 indifference curve? What is the MRS at this point? c. Derive a general expression for the MRS for this utility function. Show how it can be interpreted as the ratio of the marginal utilities. d. Does this individual...
Consider the following utility function of 2 goods, x and y: U(x,y)= - [(x-10)2 + (y-10)2]; x,y≥0 The prices of good x and y is 10 and 20 respectively. The income is denoted by m. a. Draw the indifference curves for the utility function and use arrows to explain in which direction utility increases or decreases. b. Find the consumption bundle that maximizes utility for the consumer. c. Find the Engel curve.