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4. A consumer has income I = 120. She consumes the goods V (Veggies) and M...
UES TION 16 A consumer consumes two commodities, m and n, and has a utility function...
UES TION 16 A consumer consumes two commodities, m and n, and has a utility function z = mn. The price of M is Pm- $10 and the price of n is P $40 and the income of the consumer is Y- $180. As you kno optimal bundle there will be a tangency between one of the indifference curves and the budget line. In other words, the slope of the indifference curve and the slope of the budget line will...
Q1. Suppose consumer consumes two goods, X and Y. The price of X is P x...
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 a consumer has budget of $120 per week to spend on food. Consumer can choose...
Suppose a consumer has budget of $120 per week to spend on food. Consumer can choose to eat at restaurants (R), in which case he spends about $20 per meal (P $20), or spend his money on All-Other-Food (PAOP $1) 2. a. Ilustrate consumer's budget line. Plot R on the horizontal axis. b. If consumer's utility function is U-R AOF, what will be his optimal bundle? What would be the value of his utility at optimal bundle? How much money...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the price of French fries is pe = $2. You are given the following information about the price of burgers and the number of burgers the consumer will buy at that price: Price of Burgers Quantity of Burgers A B C $1.00 $2.00 $5.00 10 5 2 Use an indifference curve and budget line diagram to draw the consumer's three budget lines and three optimal...
Suppose an individual’s utility function for two goods X and Y is givenby U(X,Y) = X^(3/4)Y^(1/4)...
Suppose an individual’s utility function for two goods X and Y is givenby U(X,Y) = X^(3/4)Y^(1/4) Denote the price of good X by Px, price of good Y by Py and the income of the consumer by I. a) (2 points) Write down the budget constraint for the individual. b) (4 points) Derive the marginal utilities of X and Y. c) (3 points) Derive the expression for the marginal rate of substitution of X for Y. Write down the tangency...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different consumers. Each consumer has $150 to spend (income) and faces prices Px = $2 and Py = $3 for goods X and Y. Consumers I, II, and III have utility functions U'(X, Y) = X? + Y, U"(X, Y) = X12 + Yl2, and UTM(X, Y) = X´Y, respectively. For each consumer, do the following steps. a [15 points] Carefully express the consumer's choice...
Ons of approach rent the Furthermore, the Fire 7:4 rate indeference curve, budget line and relative...
Ons of approach rent the Furthermore, the Fire 7:4 rate indeference curve, budget line and relative determine the utility maximization th possible indifference curve rifle th mer preference panely to th e at contr a o m en het Total Utility Maximization - MOL the -MRS e specific Bobby he game below The above equation is the condition of Total tility M unitions the point of between indifference curve and the budget line as the best possible combination good consumption...
Question 1: Louis the retired Canadian lives on a fixed budget and consumes only two goods:...
Question 1: Louis the retired Canadian lives on a fixed budget and consumes only two goods: toques (T) and maple syrup (M). Suppose Louis monthly budget is 100 and the price of the two goods are (PT,PM) (4,2). (a) Make a properly labeled diagram illustrating Louis'budget constraint with T on the hori- zontal axis and M on the vertical axis. Indicate the area corresponding to the set of bundles (M, T) that Louis can afford. (b) What is the maximum...
6) If she has sixty dollars then the price of good Y is ____ and the...
6) If she has sixty dollars then the price of good Y is
____ and the price of good X is _______.
a) $3, $2
b) $2, $3
c) $2, $2
d) $3, $3
7) If point A were Jane’s optimal bundle what would her
marginal rate of substitution be at that point?
a) -2
b) -2/3
c) -3/2
d) -1/2
- 0 X midterm_review_questions.pdf - Adobe Acrobat Reader DC * V W RECH) ÄO I m idterm review q......
UES TION 16 A consumer consumes two commodities, m and n, and has a utility function z = mn. The price of M is Pm- $10 and the price of n is P $40 and the income of the consumer is Y- $180. As you kno optimal bundle there will be a tangency between one of the indifference curves and the budget line. In other words, the slope of the indifference curve and the slope of the budget line will...
Suppose a consumer has budget of $120 per week to spend on food. Consumer can choose to eat at restaurants (R), in which case he spends about $20 per meal (P $20), or spend his money on All-Other-Food (PAOP $1) 2. a. Ilustrate consumer's budget line. Plot R on the horizontal axis. b. If consumer's utility function is U-R AOF, what will be his optimal bundle? What would be the value of his utility at optimal bundle? How much money...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the price of French fries is pe = $2. You are given the following information about the price of burgers and the number of burgers the consumer will buy at that price: Price of Burgers Quantity of Burgers A B C $1.00 $2.00 $5.00 10 5 2 Use an indifference curve and budget line diagram to draw the consumer's three budget lines and three optimal...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different consumers. Each consumer has $150 to spend (income) and faces prices Px = $2 and Py = $3 for goods X and Y. Consumers I, II, and III have utility functions U'(X, Y) = X? + Y, U"(X, Y) = X12 + Yl2, and UTM(X, Y) = X´Y, respectively. For each consumer, do the following steps. a [15 points] Carefully express the consumer's choice...
Ons of approach rent the Furthermore, the Fire 7:4 rate indeference curve, budget line and relative determine the utility maximization th possible indifference curve rifle th mer preference panely to th e at contr a o m en het Total Utility Maximization - MOL the -MRS e specific Bobby he game below The above equation is the condition of Total tility M unitions the point of between indifference curve and the budget line as the best possible combination good consumption...
Question 1: Louis the retired Canadian lives on a fixed budget and consumes only two goods: toques (T) and maple syrup (M). Suppose Louis monthly budget is 100 and the price of the two goods are (PT,PM) (4,2). (a) Make a properly labeled diagram illustrating Louis'budget constraint with T on the hori- zontal axis and M on the vertical axis. Indicate the area corresponding to the set of bundles (M, T) that Louis can afford. (b) What is the maximum...
6) If she has sixty dollars then the price of good Y is
____ and the price of good X is _______.
a) $3, $2
b) $2, $3
c) $2, $2
d) $3, $3
7) If point A were Jane’s optimal bundle what would her
marginal rate of substitution be at that point?
a) -2
b) -2/3
c) -3/2
d) -1/2
- 0 X midterm_review_questions.pdf - Adobe Acrobat Reader DC * V W RECH) ÄO I m idterm review q......
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