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Suppose there are two goods, food and clothing. My preference has the following properties: 1. I...
please show clear steps Suppose there are two goods, food and clothing. My preference has the...
please show clear steps
Suppose there are two goods, food and clothing. My preference has the following properties: 1. I am rational. 2. I need at least one unit of food and one unit of clothing in order to survive. 3. I strictly prefer surviving over not surviving. 4. I am indifferent over all situations in which I do not survive 5. When I have strictly more than one unit of each good, I satisfy strict monotonicity and strict convexity....
please show clear steps. Thanks! Suppose there are two goods, food and clothing. My preference has...
please show clear steps. Thanks!
Suppose there are two goods, food and clothing. My preference has the following properties: 1. I am rational. 2. I need at least one unit of food and one unit of clothing in order to survive. 3. I strictly prefer surviving over not surviving. 4. I am indifferent over all situations in which I do not survive 5. When I have strictly more than one unit of each good, I satisfy strict monotonicity and strict...
Suppose that Bridget and Erin spend their incomes on only two goods, food (F) and clothing...
Suppose that Bridget and Erin spend their incomes on only two goods, food (F) and clothing (C). Bridget’s preferences are represented by the utility function U(F,C)=10FC, while Erin’s preferences are represented by the utility function UF,C=5F2C. With the market basket F=2 and C=5, both Bridget and Erin get 100 unit of utility. Is it correct to say that Bridget and Erin have the same preference (i.e. their indifference curves are the same)? Explain your answer. Would you agree that Erin...
rick purchses two goods food and clothing 1. Rick purchases two goods, food and clothing. He has a diminishing marg...
rick purchses two goods food and clothing
1. Rick purchases two goods, food and clothing. He has a diminishing marginal rate of substi- tution of food for clothing. Let z denote the amount of food consumed and y the amount of elothing. Suppose the price of food increases from P to P (> P). On a clearly labeled graph, illustrate the income and substitution effects of the price change on the consumption of food. Do so for each of the...
Dr. Weirdtaste buys only food (F) and clothing (C) out of his income. He has positive...
Dr. Weirdtaste buys only food (F) and clothing (C) out of his income. He has positive marginal utilities for both goods, and his MRSF,C is increasing. Draw two of Dr. Weirdtaste’s indifference curves, IC1 and IC2, where bundles on IC2 are preferred to bundles on IC1.
John has preferences for food F and clothing C described by a utility function U(F,C) =...
John has preferences for food F and clothing C described by a utility function U(F,C) = min (F, 2C). Suppose that food costs $1 a unit and that clothing costs $2 a unit. John has $12 to spend on food and clothing. (10 pts.) a) On a graph, draw indifference curves corresponding to u = 6, u = 10, u = 14. Make sure to label coordinates clearly. Using the graph, find the optimal choice of food and clothing. Let...
1. True or False, and explain briefly. 1) The assumption that more is better implies that...
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that good 1 is an inferior good at the current prices and income). If the price and also the income of the consumer doubles, how does his demand for good at all. Explain. all his income on two goods, say good 1 and good 2. Assume ces and income). If the price of both goods double w does his demand for good 1 change, if...
Question 2 A consumer purchases two goods, food (x) and clothing (y). He has the utility function...
Question 2 A consumer purchases two goods, food (x) and clothing (y). He has the utility function U(X,Y) = XY, where X and Y denote amounts of X and Y consumed. Marginal utilities of X and Y are MUx = y and MUy = x. The consumer’s income is $72 per week and that the price of y is Py = $1 per unit and price of x is Px1 = $9 per unit. What are his initial quantities of X and...
4.1. Suppose you have two distinct bundles X and Y, and, for you, X is strictly...
4.1. Suppose you have two distinct bundles X and Y, and, for you, X is strictly better than Y. Explain briefly using a graph and words why the two indifference curves associated to two bundles X and Y I(X) and I(Y) cannot cross each other. 4.2. Explain using a graph and words why if the assumption of monotonic preferences (aka "more-is- better") implies that indifference curves are not thick and they must be downward sloped. 4.3. Provide three examples of...
please show clear steps
Suppose there are two goods, food and clothing. My preference has the following properties: 1. I am rational. 2. I need at least one unit of food and one unit of clothing in order to survive. 3. I strictly prefer surviving over not surviving. 4. I am indifferent over all situations in which I do not survive 5. When I have strictly more than one unit of each good, I satisfy strict monotonicity and strict convexity....
please show clear steps. Thanks!
Suppose there are two goods, food and clothing. My preference has the following properties: 1. I am rational. 2. I need at least one unit of food and one unit of clothing in order to survive. 3. I strictly prefer surviving over not surviving. 4. I am indifferent over all situations in which I do not survive 5. When I have strictly more than one unit of each good, I satisfy strict monotonicity and strict...
rick purchses two goods food and clothing
1. Rick purchases two goods, food and clothing. He has a diminishing marginal rate of substi- tution of food for clothing. Let z denote the amount of food consumed and y the amount of elothing. Suppose the price of food increases from P to P (> P). On a clearly labeled graph, illustrate the income and substitution effects of the price change on the consumption of food. Do so for each of the...
John has preferences for food F and clothing C described by a utility function U(F,C) = min (F, 2C). Suppose that food costs $1 a unit and that clothing costs $2 a unit. John has $12 to spend on food and clothing. (10 pts.) a) On a graph, draw indifference curves corresponding to u = 6, u = 10, u = 14. Make sure to label coordinates clearly. Using the graph, find the optimal choice of food and clothing. Let...
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
3) (4pts. Consider a consumer who spends all his income on two goods, say 804 that good 1 is an inferior good at the current prices and income). If the price and also the income of the consumer doubles, how does his demand for good at all. Explain. all his income on two goods, say good 1 and good 2. Assume ces and income). If the price of both goods double w does his demand for good 1 change, if...
4.1. Suppose you have two distinct bundles X and Y, and, for you, X is strictly better than Y. Explain briefly using a graph and words why the two indifference curves associated to two bundles X and Y I(X) and I(Y) cannot cross each other. 4.2. Explain using a graph and words why if the assumption of monotonic preferences (aka "more-is- better") implies that indifference curves are not thick and they must be downward sloped. 4.3. Provide three examples of...
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