Homework Answers
At optimality 2X=3Y
ans we also know budget line P1X+P2Y=M
putting X=3/2Y into budget line
P1(1.5Y)+P2Y=M
Y=M/(1.5P1+P2) and X=1.5M/1.5P1+P2
Add Answer to:
5. Suppose the utility function is given by U(zı,T2) = 14 min{2x, 3y). Calculate the optimal...
Solve for the optimal (pi,P2, m) and (p2,P1, m) for a utility function, U(zi,T2) = XiT2-ri-T2.
Solve for the optimal (pi,P2, m) and (p2,P1, m) for a utility function, U(zi,T2) = XiT2-ri-T2.
4. Suppose the utility function is given by U(z1,x2) - (x^"2)*. Calculate the optimal consumption bundle...
4. Suppose the utility function is given by U(z1,x2) - (x^"2)*. Calculate the optimal consumption bundle 2.5 4 if Ann's income equals 10 and both goods have a price of 1.
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...
how did they get MRS= -x2/x1? Consider the utility function u ( 2 2) = Inc. +Inc. Suppose that the initial situation...
how
did they get MRS= -x2/x1?
Consider the utility function u ( 2 2) = Inc. +Inc. Suppose that the initial situation s given by Pi = 1, P2 = 2 and m = 100. Note that MU = 1 and MU2 = a) Find the consumer's optimal consumption bundle (0,2) and his utility at this consumption bundle. Solution: The budget line is 2.02 = 100 - 21 (1) Since the optimal bundle is an interior point, the tangency condition...
d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle...
d. U (1, ) (1a)(b-a 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...
4) A consumer’s utility function is u(x, y) = min{x, 3y} (a) Find the consumer’s optimal...
4) A consumer’s utility function is u(x, y) = min{x, 3y} (a) Find the consumer’s optimal choice for x, y as functions of income I and prices px,py. (b) Sketch the demand curve for y as a function of other price px when py = 10, I = 100. Suggestion: a picture showing the budget set, optimal choice and indifference curve. (I need help with the sketching which is the second part)
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of...
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of good 1 and good 2 are p1 = P2 = 4. The consumer's income is m = 120. (a) Find the consumer's preferred bundle. (b) Draw the consumer's budget line. (c) On the same graph, indicate the consumer's preferred bundle and draw the indifference curve through it. (d) Now suppose that the consumer gets a discount on good 1: each unit beyond the 4th...
In Problems 5 - 7, you are given the utility function u(x, y), income I and...
In Problems 5 - 7, you are given the utility function u(x, y), income I and two sets of prices: initial prices px,py and final prices p,%-For each problem, you are to find: (a) the optimal choice at the initial prices (b) the optimal choice at the final prices (c) the change- optimal choice at final prices - optimal choice at initial prices (d) the income effect and the substitution effect 5) u(x, y)-min(x, 3y), 1-14, p.-1, p,-2. p,-2, p,-2
2. 2.1 Draw the indifference curves for the utility function U(21, 22) = x1 + 3x2....
2. 2.1 Draw the indifference curves for the utility function U(21, 22) = x1 + 3x2. 2.2 What is the marginal rate of substitution evaluated at an arbitrary consumption bundle (21, 22)? 2.3 Suppose that p1 = 5, P2 = 2, and M = 10. Find the utility-maximizing consump- tion bundle (among those that satisfy the budge constraint) for this agent. You should be able to do this without using any calculus: it should be clear from your indifference curves....
1) Eor each of the utility functions below, find the optimal consumption bundle if pi-3 and...
1) Eor each of the utility functions below, find the optimal consumption bundle if pi-3 and p2-2 and m-240 a. u(x)-2x2 b. u(x)-xix22 c. d, e. u(x)- 2x1+X2 u(x)-min(x1,2%) u(x)-x1-X22 y(x)-max(x1,x2) X(X1,X2 2) Suppose p1-2, p2-7 for the first 2 units and p2 4 for the rest. a) Ifm-54 and u(x) -X1+3x2, then what is the optimal consumption bundle? b) Ifm-22 and u(x) - min(3xı, 2x2), , thenwhat is the optimal consumption bundle? Erom Workouts: 5.3,5.6,5.7 3)
Solve for the optimal (pi,P2, m) and (p2,P1, m) for a utility function, U(zi,T2) = XiT2-ri-T2.
4. Suppose the utility function is given by U(z1,x2) - (x^"2)*. Calculate the optimal consumption bundle 2.5 4 if Ann's income equals 10 and both goods have a price of 1.
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...
how
did they get MRS= -x2/x1?
Consider the utility function u ( 2 2) = Inc. +Inc. Suppose that the initial situation s given by Pi = 1, P2 = 2 and m = 100. Note that MU = 1 and MU2 = a) Find the consumer's optimal consumption bundle (0,2) and his utility at this consumption bundle. Solution: The budget line is 2.02 = 100 - 21 (1) Since the optimal bundle is an interior point, the tangency condition...
d. U (1, ) (1a)(b-a 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...
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of good 1 and good 2 are p1 = P2 = 4. The consumer's income is m = 120. (a) Find the consumer's preferred bundle. (b) Draw the consumer's budget line. (c) On the same graph, indicate the consumer's preferred bundle and draw the indifference curve through it. (d) Now suppose that the consumer gets a discount on good 1: each unit beyond the 4th...
In Problems 5 - 7, you are given the utility function u(x, y), income I and two sets of prices: initial prices px,py and final prices p,%-For each problem, you are to find: (a) the optimal choice at the initial prices (b) the optimal choice at the final prices (c) the change- optimal choice at final prices - optimal choice at initial prices (d) the income effect and the substitution effect 5) u(x, y)-min(x, 3y), 1-14, p.-1, p,-2. p,-2, p,-2
2. 2.1 Draw the indifference curves for the utility function U(21, 22) = x1 + 3x2. 2.2 What is the marginal rate of substitution evaluated at an arbitrary consumption bundle (21, 22)? 2.3 Suppose that p1 = 5, P2 = 2, and M = 10. Find the utility-maximizing consump- tion bundle (among those that satisfy the budge constraint) for this agent. You should be able to do this without using any calculus: it should be clear from your indifference curves....
1) Eor each of the utility functions below, find the optimal consumption bundle if pi-3 and p2-2 and m-240 a. u(x)-2x2 b. u(x)-xix22 c. d, e. u(x)- 2x1+X2 u(x)-min(x1,2%) u(x)-x1-X22 y(x)-max(x1,x2) X(X1,X2 2) Suppose p1-2, p2-7 for the first 2 units and p2 4 for the rest. a) Ifm-54 and u(x) -X1+3x2, then what is the optimal consumption bundle? b) Ifm-22 and u(x) - min(3xı, 2x2), , thenwhat is the optimal consumption bundle? Erom Workouts: 5.3,5.6,5.7 3)
Most questions answered within 3 hours.
-
Suppose that the average U.S. household uses 12100 kWh
(kilowatt‑hours) of energy in a year. If...
asked 4 minutes ago -
Patterson Company operates three segments. Income statements for
the segments imply that profitability could be improved...
asked 3 minutes ago -
In 20 words or less, what aspect of your degree course are you
passionate about? civil...
asked 14 minutes ago -
Learning Goal: To understand the relation between the strength
of an acid or a base and...
asked 16 minutes ago -
Discuss the role of integrated marketing communications
(IMC) in a firm’s overall marketing strategy? When executed...
asked 16 minutes ago -
(in Java) We wish to insert the following strings into a hash
table: BEN AL SUE...
asked 25 minutes ago -
Group think happens when the members of the group become more
interested in agreeing with each...
asked 24 minutes ago -
how might the HR Scorecard might be used to demonstrate value
creation that aligns with the...
asked 41 minutes ago -
If the racetrack publishes that the odds in favor of a horse
winning a race are...
asked 49 minutes ago -
2.
A particular sample of vinegar has a pH of 2.95.
Part A
If acetic acid...
asked 54 minutes ago -
1a.) A simple random sample of 100 Harvard undergraduates was
given a two-question astronomy test. 13%...
asked 59 minutes ago -
A spider hangs vertically from a thread of negligible mass. In
what situation, the tension in...
asked 1 hour ago