Question

11. If an individuals utility function for good X and Y is given by U(X, Y) = min {X, 2Y), the indirect utility function wil

hi how to get d for the answer?
0 0
Add a comment Improve this question Transcribed image text
Answer #1

UCX,Y)= min {x,243 X- 2y Budget Constraint. Px. X + Py. Y = I Px (24) + RyY= I (2 Px + Py) Y = I Y. I 2Px + 2y x= 2I 21x + Py

Add a comment
Know the answer?
Add Answer to:
hi how to get d for the answer? 11. If an individual's utility function for good...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • A consumer buys two goods, good X and a composite good Y. The utility function is...

    A consumer buys two goods, good X and a composite good Y. The utility function is given as U(X, Y) = 2X1/2+Y. The demand function for good X is X = (Py/Px)2. (Edit: The price of X is Px, the price of Y is Py.) Suppose that initially Px=$0.5 and then it falls and becomes Px=$0.2 Calculate the substitution effect, income effect, and the price effect and show the answer graphically.

  • how to find indirect utility function here? Jeanette has the following utility function: U-ain(x) + b*In(y), where...

    how to find indirect utility function here? Jeanette has the following utility function: U-ain(x) + b*In(y), where a+b=1 a) For a given amount of income I, and prices Px, Py, find Jeanette's Marshallian demand functions for X and Y and her indirect utility function. (6 points)

  • A consumer buys two goods, good X and a composite good Y. The utility function is...

    A consumer buys two goods, good X and a composite good Y. The utility function is given as U(X,Y) = In3XY. The price of X is Py, the price of Y is Py and Income is I. 1) Derive the demand equation for good X. ( 5 marks) 2) Are the two goods X and Y complements or substitutes? Why? ( 5 marks) 3) Suppose that I=$10 and suppose that initially the Px = $1 and subsequently Px falls and...

  • 3. If the utility is given by U(X,Y)= X +4Y and px = 1, the indirect...

    3. If the utility is given by U(X,Y)= X +4Y and px = 1, the indirect utility is given by PY I (a) 4py I (b) py 41 (c) рү 21 (d) py

  • Consider an individual making choices over two goods, x and y with initial prices px=5 and...

    Consider an individual making choices over two goods, x and y with initial prices px=5 and py= 2, with income I= 100: a) If the individual's preferences can be represented by the utility function u = 4x+ 2y; find the income, substitution and total effects of a decrease in the price of x to px= 3. b) If the individual's preferences can be represented by the utility function u = min(4x,2y); find the income, substitution and total effects of a...

  • The utility function is given by U(x, y) = xy2 . (a) Write out the demand...

    The utility function is given by U(x, y) = xy2 . (a) Write out the demand functions for goods x and y in terms of I, px, and py. (b) What is the maximum utility the consumer can achieve as a function of I, px, and py?   (c) What is the minimum the consumer needs to spend to achieve a level of utility U as a function of px, and py?   (d) The initial income is $576, initial prices are...

  • How to get the answer, explanation Use the following information to answer the next two questions: The utility function...

    How to get the answer, explanation Use the following information to answer the next two questions: The utility function of Ann is U(X,Y) = X(1/2)y(1/2) The utility function of Bob is U(X,Y)= X(3/4)Y(1/4) Also assume that they have the same income and face the same prices for the two goods. V. Consider the (X,Y) consumption bundle that maximizes Ann's utility. At this point, A. Bob also maximizes his utility B. Bob would prefer to consume more of the X-good and...

  • The utility function is given by U(x, y) = xy2 . (a) Write out the demand...

    The utility function is given by U(x, y) = xy2 . (a) Write out the demand functions for goods x and y in terms of I, px, and py. (2) (b) What is the maximum utility the consumer can achieve as a function of I, px, and py? (2) (c) What is the minimum the consumer needs to spend to achieve a level of utility U as a function of px, and py? (2) (d) The initial income is $576,...

  • 1.Suppose a consumer had a utility function given by: U= 9X + 2Y. If the price...

    1.Suppose a consumer had a utility function given by: U= 9X + 2Y. If the price of Good X (Px) is $8 and the price of Good Y is $4then what is the utility maximizing quantity of Good X the consumer will purchase with a budget of $32? 2. Suppose an individual had a utility function given by: U=X^4Y^0.6 Calculate this individual's Marginal Rate of Substitution (MRSxy) when they have a bundle with 3 units of Good X and 1.8...

  • The utility function is given by U(x, y) = xy2 . (a) Write out the demand...

    The utility function is given by U(x, y) = xy2 . (a) Write out the demand functions for goods x and y in terms of I, px, and py. (2) (b) What is the maximum utility the consumer can achieve as a function of I, px, and py? (2) c) What is the minimum the consumer needs to spend to achieve a level of utility U as a function of px, and py? (2) (d) The initial income is $576,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT