2. Mike's preferences are represented by the utility function U(A, B) A+2B. He has an income...
2. Mike's preferences are represented by the utility function U(A, B)- A+2B. He has an income of $20. Consider each of the following combination of prices of goods. On the same graph, (i) graph a family of indifference curves for the consumer, (ii) graph the budget lines for each combination of prices, (iii) calculate and label the optimal consumption choice(s) for each combination of prices, and (iv) calculate the utility Mike derives from consuming the optimal consumption choice bananas (a)...
2. Mike's preferences are represented by the utility function U(A, B) A+2B. He has an income of $20. Consider each of the following combination of prices of goods. On the same graph, (i) graph a family of indifference curves for the consumer, (ü) graph the budget lines for each combination of prices, (i cakculate and label the optimal consumption choice(s) for each combination of prices, and (iv) cakulate the utility Mike derives from consuming the optimal consumption choice. bananas 20...
3. Suppose your utility function (e. level of satisfaction from consuming a and b) is given by U(a, b)=a 1/32/3 where a represents apple and b represents banana. Your total income is $500. The price of apple is $5 and the price of banana is $10. (a) Write your Budget Constraint (BC). What is the Marginal Rate of Transformation? (b) Find the Marginal Rate of Substitution. (c) Find the consumption combination of bananas and apples that maximizes your utility given...
I only need answers for e and f. Problem 3: Suppose your utility function (i.e. level of satisfaction from consuming a and b) is given by ?(a, b)=?1/3?2/3 where a represents apple and b represents banana. Your total income is $500. The price of apple is $5 and the price of banana is $10.(a) Write your Budget Constraint (BC).(b) Write your Rational Choice (RC). (c) Find the consumption combination of bananas and apples that maximizes your satisfaction given your budget...
Diana's utility function for consuming apples (Xa) and Bananas (Xb) is U(Xa,Xb) = XaXb. Suppose the prices of apples is $1, bananas $2, and her income is $40. On a graph with bananas on the y-axis, use blue ink to draw Bianca’s budget line.With red ink, plot an indifference curve that gives her a utility level of 150. Using black ink, plot an indifference curve that gives her a utility level of 300. Can Bianca afford any bundles that give...
Can't use Lagrange on this. Multiple Choice Practice- Show work or provide short explanation 4. Charlie's utility function for apples (A) and bananas (B) is U(AB)-AB. The price of apples used to be S1 per apple and the price of bananas used to be $2 per banana. His incomse was $40 per day. If the price of apples increases to $2.25 and the price of bananas falls to S1.25, then in order to be able to afford his old bundle,...
1. Dorothy's utility function is U(B, O) = (B + 2) (0 + 1) where B is her consumption of bananas and O is her consumption of oatmeal. MUB = 0 + 1, MUo = B + 2. (Place Oatmeal on the y axis.) a. Write down the expression and draw Dorothy's indifference curve through (2,8). b. Suppose po = Pb = $1 and M = $11, draw the budget constraint on the same graph as her indifference curve. c....
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X is MUx = Y. His marginal utility of Y is MUY = . He has income $12. When the prices are Px - 1 and Py -1, Andy's optimal consumption bundle is X* -6 and Y' = 6. When the prices are Px = 1 and P, = 4, Andy's optimal consumption bundle is X** = 6 and Y* 1.5. Suppose the price of...
Question 2: Lorelai's choice behavior can be represented by the utility function u(x1, 2)0.9Inx)0.1x2 The prices of both x1 and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set but at least linear in good x2) the preferences and parameters accordingly as given in the question. Click...
Lorelai's choice behavior can be represented by the utility function u(x1, 2) 0.9n(x)0.1x2. The prices of both xi and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, but at least linear in good x2) 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set the preferences and parameters accordingly as given in the question. Click on...