What is the MRS of the utility function, u = x1 2/4 + x2 1/4 ?
What is the MRS of the utility function, u = x1 2/4 ∙ x2 1/4?
What is the MRS for the following utility function U(x1, x2) = ln(x1) + ln(x1 + x2) (show all the work). Does it satisfy the law of diminishing MRS?
Luke's choice behavior can be represented by the utility function u(x1,x2)= x1 + x2.The prices of x1 and x2 are denoted as p1 and p2, and his income is m. 1. Draw at least three indifference curves and find its slope (i.e. MRS). Is the MRS changing depending on the points of (x1, x2) at which it is evaluated, or constant? 2. Draw a budget constraint assuming that p1 < P2. Find the optimal bundle (x1*,x2*) as a function of income and prices. 3....
1. Consider the utility function: u(x1,x2) = x1 +x2. Find the corresponding Hicksian demand function 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects to be found below. (b)...
The consumer has the utility function U(x1 , x2) = (x1-2)4 (x2-3)3, subject to her budget constraint 10 = 4x1 + 3x2. Write the utility maximization of this consumer using the Lagrangian method and find the optimal value of x1 and x2.
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...
What are the marginal utilities of x1 and x2 given the following utility functions, then find the MRS: U(x1, x2) = 4 x1 + 8 x2 U(x1, x2) = (x1 + 2)(x2 + 1) Example. To find the marginal utility for x1, think about how a 1 unit increase in x1, keeping all else constant, will change the amount of utility U. Once you have the marginal utilities for both, you can calculate the MRS.
1. Consider the utility function: u(x1,x2) = x1 + x2. Find the corresponding Hicksian demand function. 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p =(2, 1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects...
Nathan’s utility function is U(x1, x2) = lnx1 + x2. If the price of good 1 is $1, the price of good 2 is $5, and his income is $100, how many units of good 1 (x1) and good 2 (x2) will Nathan consume?
1. Consider the utility function: u(x1,x2) = x1 + x2. Find the corresponding Hicksian demand function. 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects...