Homework Answers
1.
A
Under the budget of $300:
Maximum number of sweaters purchased = 300/25 = 12
Maximum number of jeans to be purchased = 300/75 = 4
The budget constraint is shown as follows:
=============
B.
MU of sweater per dollar = 2/25 = .08
MU of jeans per dollar = 3/75 = .04
Since MU of sweater per dollar is not equal to the MU of jeans per dollar, then buying equal quantity of jeans as well as sweaters will not maximize the total utility. Hence, buying 3 units of jeans and 3 units of sweaters is not an optimal choice.
Since MU per unit is fixed and MU of sweater per dollar is higher than the MU of jeans per dollar, then consumer should buy more sweaters and no jeans to maximize the total utility.
Add Answer to:
1. Suppose the price of a sweater is $25 and the price of a pair of...
6-8, please show work, thanks! 1. Extending the exercise in class, the consumers have $300 to...
6-8, please show work, thanks!
1. Extending the exercise in class, the consumers have $300 to spend. Now the price is $100 for jeans. Jeans 100 Sweater $ 25 Marginal Marginal Utility per Utility (A Dollar Spent = (A) / $25 Quantity Quantity Marginal Utility (B Marginal Utility per Dollar Spent = (B) / $100 14=100/25 VOO AWNO 80 SI 160 2.6=160/100 150 1.5 100 1.0 08 0.3 10 0.1 3 0.03 20.02 1. Calculate the marginal utility per dollar...
Suppose the price of Good X is $4 and the price of Good Y is $3....
Suppose the price of Good X is $4 and the price of Good Y is $3. If a consumer has a Marginal Rate of Substitution (MRSxy) of 2 for the bundle they are considering, then given their budget constraint, the consumer... Select one O a. Cannot reach a higher level of utility given their budget constraint. Ob. Would have a higher utility if they bought more of Good X. c. Would have a higher utility if they bought less of...
suppose the price of a sweater is $40. julia’s marginal benefit for purchasing each additional sweater...
suppose the price of a sweater is $40. julia’s marginal benefit for
purchasing each additional sweater is given in the table below.
julia gets most benefit from the first sweater and less benefit
from each additional sweater. if julia is behaving rationally, how
many sweaters will she purchase?
value: 10.00 points Suppose the price of a sweater is $40. Julia's margina sweater. If Julia is behaving rationally, how many swe Marginal Benefit 1st sweater 2nd sweater 3rd sweater 4h sweater...
QUESTION 7 Katie has typically shaped indifference curves and is currently spending all of her income...
QUESTION 7 Katie has typically shaped indifference curves and is currently spending all of her income on jeans and sweaters. The marginal utility of the last pair of jeans was 25 and the marginal utility of the last sweater was 40. If jeans cost $30 and sweaters cost $50, then to maximize utility, Katie should: a. consume more sweaters and fewer jeans b. consumer more jeans and fewer sweaters c. Consume all sweaters as this is a corner solution. d....
Question 2015 Bilie spends all of her income on Soccer balls and jeans, and the price of a pair of jeans is three t...
Question 2015 Bilie spends all of her income on Soccer balls and jeans, and the price of a pair of jeans is three times the price of soccer balls. In order to maximize happiness, Bilie should A. buy three times as many soccer balls as pairs of jeans B. buy three times as many pairs of jeans as soccer balls. C. buy both items until the marginal utility of soccer balls three times the marginality of a pair of jeans...
1. Price of x is 12 and price of y is 8. Answer the following questions...
1. Price of x is 12 and price of y is 8. Answer the following questions for a consumer who earns $600 and whose preference can be represented with the utility functions U(x,y) x0.4y0.6 = a) Write down the utility maximization problem. (2 points) b) Does the utility function represent convex preference? Explain. (2 points) c) Write down the budget constraint. What is the slope of the budget line? (2 points) d) What is the slope of the indifference curve...
If pA = $10, PB = $5,Y = $75, where p is the price of a...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
1. Suppose that the price of oranges is $1 per unit and the price of pencils...
1. Suppose that the price of oranges is $1 per unit and the price of pencils is $70 per unit. In addition, suppose that your income is $1900. If you spend all your money on oranges, how many oranges can you buy? 1900 oranges 2. The table below shows total utility for two products. Suppose that the price for product A is $5 and the price for product B is $5. Number of product A Total Utility for A Number...
1. (24 total points) Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also,...
1. (24 total points) Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also, the consumer has $72 to spend, and the price of Good X, PX = $4. Let Good Y be a composite good whose price is PY = $1. So on the Y-axis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X. a) (2 points) How much X and Y...
1.Use the table below to answer the following question. Assume that the price of product A...
1.Use the table below to answer the following question. Assume that the price of product A is $4.47 while the price for product B is $5.79. The buyer has a budget of $50. Q MUA MUB 1 22 25 2 21 24 3 20 23 4 19 22 5 18 21 6 17 20 7 16 19 8 15 18 9 14 17 10 13 16 Given the marginal utilities The optimal bundle is ____. A. 6 of product A...
6-8, please show work, thanks!
1. Extending the exercise in class, the consumers have $300 to spend. Now the price is $100 for jeans. Jeans 100 Sweater $ 25 Marginal Marginal Utility per Utility (A Dollar Spent = (A) / $25 Quantity Quantity Marginal Utility (B Marginal Utility per Dollar Spent = (B) / $100 14=100/25 VOO AWNO 80 SI 160 2.6=160/100 150 1.5 100 1.0 08 0.3 10 0.1 3 0.03 20.02 1. Calculate the marginal utility per dollar...
Suppose the price of Good X is $4 and the price of Good Y is $3. If a consumer has a Marginal Rate of Substitution (MRSxy) of 2 for the bundle they are considering, then given their budget constraint, the consumer... Select one O a. Cannot reach a higher level of utility given their budget constraint. Ob. Would have a higher utility if they bought more of Good X. c. Would have a higher utility if they bought less of...
suppose the price of a sweater is $40. julia’s marginal benefit for
purchasing each additional sweater is given in the table below.
julia gets most benefit from the first sweater and less benefit
from each additional sweater. if julia is behaving rationally, how
many sweaters will she purchase?
value: 10.00 points Suppose the price of a sweater is $40. Julia's margina sweater. If Julia is behaving rationally, how many swe Marginal Benefit 1st sweater 2nd sweater 3rd sweater 4h sweater...
Question 2015 Bilie spends all of her income on Soccer balls and jeans, and the price of a pair of jeans is three times the price of soccer balls. In order to maximize happiness, Bilie should A. buy three times as many soccer balls as pairs of jeans B. buy three times as many pairs of jeans as soccer balls. C. buy both items until the marginal utility of soccer balls three times the marginality of a pair of jeans...
1. Price of x is 12 and price of y is 8. Answer the following questions for a consumer who earns $600 and whose preference can be represented with the utility functions U(x,y) x0.4y0.6 = a) Write down the utility maximization problem. (2 points) b) Does the utility function represent convex preference? Explain. (2 points) c) Write down the budget constraint. What is the slope of the budget line? (2 points) d) What is the slope of the indifference curve...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
Most questions answered within 3 hours.
-
A combustion reaction is describes as a carbon source reacting
with oxygen and producing carbon dioxide...
asked 1 minute ago -
Buckminsterfullerence is a recently allotrope of carbon in which
carbon atoms form molecules of formula C_60,...
asked 3 minutes ago -
Lower Equitorial and Upper Equitorial are the same except Lower
Equitorial has a larger capital stock....
asked 8 minutes ago -
how do you think that pH of a jar where you have added a certain
amount...
asked 18 minutes ago -
If the Federal Reserve increases the reserve requirement, what
will happen to the Money Supply in...
asked 13 minutes ago -
Suppose that market demand for a good is given by Q = 9 - 0.3 P...
asked 20 minutes ago -
two thin lenses are separated by a distance x. The first lens
has a focal length...
asked 21 minutes ago -
The computer that controls a bank's automatic teller machine
crashes a mean of 0.6 times per...
asked 25 minutes ago -
`1) How is -9 (base 10) represented in 8-bit two's complement
notation?
a) 00001001
b)11110111
c)11110110...
asked 34 minutes ago -
A 10.000 g sample of water contains 11.19% H by mass. what
should be the %H...
asked 52 minutes ago -
Consider an investment game among 2 players. Each player can
either invest,
i, or not invest,-i....
asked 49 minutes ago -
The time taken to complete a particular task is normally
distributed with a standard deviation of...
asked 59 minutes ago