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3) Consider the utility function U = 3FC. a. Carefully sketch the indifference curve for utility...
4) Consider the utility function U = 2F + 5C. a. Carefully sketch the indifference curve...
4) Consider the utility function U = 2F + 5C. a. Carefully sketch the indifference curve for utility of 20. Label four market baskets on the indifference curve. (Hint: In Desmos, enter 20=2x+5y) b. Carefully sketch the indifference curve for utility of 40. Label four market baskets on the indifference curve. c. Which market basket gives highest utility: (0,10) or (2,8) or (5,5) or (9,2)? Rank the market baskets.
3. Paul derives utility only from CDs and DVDs. His utility function is Sketch Paul's indifference...
3. Paul derives utility only from CDs and DVDs. His utility function is Sketch Paul's indifference curves for U-5, U-10, and U-20 Suppose Paul has $200 to spend and that CDs cost $5 and DVDs cost $20. Draw Paul's budget constraint on the same graph as his ndifference curves Suppose Paul spends all of his income on DVDs. How many can he buy and what is his utility? Show that Paul's income will not permit him to reach the U-20...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the indifference curves for u = 50, 72 and 98. e indifference Carved forbise banta un b. Sketch budget constraint of 5x +10y = 30. Label intercepts (where it crosses the axes). 00:0 VE c. Solve for calculate) the optimal bundle (x, y) and sketch the optimal solution.
3. Suppose the utility function for two goods, x and y, is: U = U(x,y) =...
3. Suppose the utility function for two goods, x and y, is: U = U(x,y) = xłyż. a. Graph the indifference curve for U = 10. b. If x = 5, what must y equal to be on the U = 10 indifference curve? What is the MRS at this point? c. Derive a general expression for the MRS for this utility function. Show how it can be interpreted as the ratio of the marginal utilities. d. Does this individual...
7.5. Continue assuming a, b -^. Draw two indifference curves of the utility function. To get...
7.5. Continue assuming a, b -^. Draw two indifference curves of the utility function. To get full credit, draw one with the level of utility 2 and the other with the level of utility 3. For each indifference curve, label at least one point on the curve. 7.6. Draw tangent lines at (x, y)- (1, 4) and (x, y) - (4, 1) in the same graph and label the slopes you solved in MRS(1, 4) and MRS(4, 1). Consider a...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 a) Is the assumption that...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 a) Is the assumption that more is better satisfied for both goods b) Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. c)What is MRS x,y? d) Is MRS x,y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? e) On a graph with x on the horizontal axis and y on the vertical...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 a) Is the assumption that...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 a) Is the assumption that more is better satisfied for both goods b) Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. c)What is MRS x,y? d) Is MRS x,y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? e) On a graph with x on the horizontal axis and y on the vertical...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 e) On a graph with...
Consider the utility function U(x,y) = 3x+y, with MUx=3 and MUy=1 e) On a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve (it is not exactly to scale, but it needs to reflect accurately whether there is a diminishing MRS x,y). Also, indicate on your graph whether the indifference curve will intersect either or both exes. label the curve U1. f) on the same graph draw a second indifference curve...
Consumption-Savings Consider a consumer with a lifetime utility function U = u(Ct) + _u(Ct+1) that satisfies...
Consumption-Savings Consider a consumer with a lifetime utility function U = u(Ct) + _u(Ct+1) that satisfies all the standard assumptions listed in the book. The period t and t + 1 budget constraints are Ct + St = Yt Ct+1 + St+1 = Yt+1 + (1 + r)St (a) What is the optimal value of St+1? Impose this optimal value and derive the lifetime budget constraint. (b) Derive the Euler equation. Explain the economic intuition of the equa- tion. (c)...
Question 6 (Utility). Suppose a consumer's utility function is given by U(x, x)=x7x2 Draw an indifference...
Question 6 (Utility). Suppose a consumer's utility function is given by U(x, x)=x7x2 Draw an indifference curve with a value of 10 and an indifference curve with a value of 16. Label two points on each indifference curve as well as the axes. a) b) What is the marginal utility with respect to xi? What is the marginal utility with respect to x? What is the
4) Consider the utility function U = 2F + 5C. a. Carefully sketch the indifference curve for utility of 20. Label four market baskets on the indifference curve. (Hint: In Desmos, enter 20=2x+5y) b. Carefully sketch the indifference curve for utility of 40. Label four market baskets on the indifference curve. c. Which market basket gives highest utility: (0,10) or (2,8) or (5,5) or (9,2)? Rank the market baskets.
3. Paul derives utility only from CDs and DVDs. His utility function is Sketch Paul's indifference curves for U-5, U-10, and U-20 Suppose Paul has $200 to spend and that CDs cost $5 and DVDs cost $20. Draw Paul's budget constraint on the same graph as his ndifference curves Suppose Paul spends all of his income on DVDs. How many can he buy and what is his utility? Show that Paul's income will not permit him to reach the U-20...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the indifference curves for u = 50, 72 and 98. e indifference Carved forbise banta un b. Sketch budget constraint of 5x +10y = 30. Label intercepts (where it crosses the axes). 00:0 VE c. Solve for calculate) the optimal bundle (x, y) and sketch the optimal solution.
3. Suppose the utility function for two goods, x and y, is: U = U(x,y) = xłyż. a. Graph the indifference curve for U = 10. b. If x = 5, what must y equal to be on the U = 10 indifference curve? What is the MRS at this point? c. Derive a general expression for the MRS for this utility function. Show how it can be interpreted as the ratio of the marginal utilities. d. Does this individual...
7.5. Continue assuming a, b -^. Draw two indifference curves of the utility function. To get full credit, draw one with the level of utility 2 and the other with the level of utility 3. For each indifference curve, label at least one point on the curve. 7.6. Draw tangent lines at (x, y)- (1, 4) and (x, y) - (4, 1) in the same graph and label the slopes you solved in MRS(1, 4) and MRS(4, 1). Consider a...
Question 6 (Utility). Suppose a consumer's utility function is given by U(x, x)=x7x2 Draw an indifference curve with a value of 10 and an indifference curve with a value of 16. Label two points on each indifference curve as well as the axes. a) b) What is the marginal utility with respect to xi? What is the marginal utility with respect to x? What is the
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