(a) Both have different utility functions, and their utility curve for U=100 intersects at where F=2 and C=5. Yet the Bridget and Erin's individual utility curves would not intersect for different utility levels, but comparing both of their Utility functions, they would intersect where or or . We have the required graphs as below.
We can see that Bridget's IC (B) is different from Erin's IC (E), its just that when both are at utility level U=100, their IC's intersects at point A, where F=2 and C=5. We can even algebraically see that they have different sets of preferences for the same utility, only except at point A.
Here we can see different ICs (U = 100,80,60) of B and E, and they intersect at F=2 (as solved above), and at C = 5,4,3.
[Note that we can compare different MRS also to state that both have different ICs. At F=2 and C=5, Bridget is willing to forgo units of C for adding a unit F, while Erin is willing to forgo units of C for adding a unit F. But MRS seems to be required in the next part, so MRS is used in part b.]
(b) Bridget's MRS would be as or or , ie .
Erin's MRS would be as or or or , ie .
We have since or for any combination of C and F. This means that Erin is willing to forgo more units of Cs for an additional unit F, than Bridget. This would mean that Erin enjoys clothes less than Bridget, since Erin can forgo more clothes than Bridget for the same amount of food, to remain at the same utility level. Moreover, it doesn't depend on whether F<4 or not, but is true for all possible combinations of F and C.
Suppose that Bridget and Erin spend their incomes on only two goods, food (F) and clothing...
The utility that Julie receives by consuming food F and clothing C is given by U(F, C) = FC. For this utility function, the marginal utilities are MUF = C and MUC = F. a) On a graph with F on the horizontal axis and C on the vertical axis, draw indifference curves for U = 12, U = 18, and U = 24. b) Do the shapes of these indifference curves suggest that Julie has a diminishing marginal rate...
3.10. The utility that Julie receives by consuming food F and clothing C is given by U(F, C) = FC. For this utility function, the marginal utilities are MUF = C and MUC = F. a) On a graph with F on the horizontal axis and C on the vertical axis, draw indifference curves for U = 12, U = 18, and U= 24. b) Do the shapes of these indifference curves suggest that Julie has a diminishing marginal rate...
Instructions: Answer the following questions as completely as possible. Write your answer neatly and legibly. When drawing a graph, make sure that you label axes and curves, and include appropriate coordinates. Always show your work. Suppose that Bridget and Erin spend their incomes on two goods, food (F) and clothing (C). Bridget’s preferences are represented by the utility function U(F,C) = 10FC, while Erin’s preferences are represented by the utility function U ( F , C ) = 0.20 F^2...
John has preferences for food F and clothing C described by a utility function U(F,C) = min (F, 2C). Suppose that food costs $1 a unit and that clothing costs $2 a unit. John has $12 to spend on food and clothing. (10 pts.) a) On a graph, draw indifference curves corresponding to u = 6, u = 10, u = 14. Make sure to label coordinates clearly. Using the graph, find the optimal choice of food and clothing. Let...
Nora consumes only two goods (food and clothing) and her preferences for these goods can be represented by the following utility function UF,C=F2C where F is the quantity of food consumed and C is the amount of clothing consumed respectively. Suppose Nora’s allocated monthly income on the two goods is $M and the prices of the two goods (food and clothing) she prefers are $PF for food and $PC for clothing. Using the above information write Nora’s utility maximization problem...
Question 1: Robert and Erin are trapped on a deserted island with only two goods: Wine (W) and Crackers (C). Robert currently has 6 bottles of wine and 9 boxes crackers whereas Erin has 9 bottles of wine and 6 boxes of crackers. Robert's preferences are represented by his utility function UR = W0.6C0.4 and Erin's by UE = W0.400.6. Suppose instead that Robert and Erin used a market to trade and that the prices of each good are such...
Question 1: Robert and Erin are trapped on a deserted island with only two goods: Wine (W) and Crackers (C). Robert currently has 6 bottles of wine and 9 boxes crackers whereas Erin has 9 bottles of wine and 6 boxes of crackers. Robert's preferences are represented by his utility function UR = W0.6C0.4 and Erin's by UE = W0.400.6. (a) Calculate MRSWc for both Robert and Erin. Are they the same or different given their endowments of W and...
If the utility function (U) between food (F) and clothing (C) can be represented as U= SQRT(F*C), the marginal rate of substitution of clothing for food will ________ if more food and less clothing are consumed. A) increase in absolute terms B) decrease in absolute terms C) remain the same D) Not enough information.
Robert and Erin are trapped on a deserted island with only two goods: Wine (W) and Crackers (C). Robert currently has 4 bottles of wine and 16 boxes of crackers whereas Erin has 16 bottles of wine and 4 boxes of crackers. Robert's preferences are represented by his utility function UR = W0.5 C0.5 and Erin's by UE = W0.5 C0.5 . Suppose Robert and Erin use a market to trade goods and that Pw = Pc = 1 How...
2 and 3 please. A consumer purchases two goods, food (F) and clothing (C). Her utility function is given by U(F,C)= FC +F. The marginal utilities are MU, = C +1 and MUS = F. The price of food is Pc , the price of clothing is Pc, and the consumer's income is I. 1) What is the demand curve for clothing? 2) Is clothing a normal good in this case? Charlie consumes two goods, professional baseball games (B) and...