Homework Answers
Answer : The answer is option A.
Mathematically for giffen good (
x1
/
p1) > 0. Giffen good is an inferior good. So, as here (x1
/
p1) > 0 hence good 1 is an inferior good. Hence except option A
other options are not correct. Therefore, option A is the correct
answer.
Add Answer to:
Suppose a consumer's optimal consumption of a good is determined by the equation x1 = x1(P1,...
Suppose a consumer's optimal consumption of a good is determined by the equation x* = x1(P1,...
Suppose a consumer's optimal consumption of a good is determined by the equation x* = x1(P1, P2, m) where p1 is the price of good 1, p2 is the price of good 2, and m is the consumer's income. If which of the following must be true? (Choose the best answer). O Good one and good 2 are complements Good 1 is not an inferior good O Good 1 is a Giffen good O Good one and good 2 are...
D 16. Suppose a consumer's optimal consumption of a good is determined by the equation **...
D 16. Suppose a consumer's optimal consumption of a good is determined by the equation ** = x1(P1, P2, m) where pi is the price of good 1, P2 is the price of good 2, and m is the consumer's income. If dx1 Om =-1 which of the following must be true? (Choose the best answer). Good 1 and good 2 are complements Good one is a normal good Good one is an inferior good Good 1 and good 2...
(10 points) Wendy's utility over consumption bundles (x1, x2) is given by u(x1,x2) = VX1 +...
(10 points) Wendy's utility over consumption bundles (x1, x2) is given by u(x1,x2) = VX1 + 21X2. If the price of good 1 is $2/unit, the price of good 2 is $1/unit and income is $120, what is Wendy's optimal consumption of Good 2? (You can use the 5 step method to solve this problem). (10 points) When u(x1, x2) = min ), at prices and income P1, P2, and I, demand for good 1 is given by xi (P1,...
The utility function is u = x1½ + x2, and the budget constraint is m =...
The utility function is u = x1½ + x2, and the budget constraint is m = p1x1 + p2x2. Derive the optimal demand curve for good 1, x1(p1, p2), and good 2, x2(m, p1, p2). Looking at the cross price effects (∂x1/∂p2 and ∂x2/∂p1) are goods x1 and x2 substitutes or complements? Looking at income effects (∂x1/∂m and ∂x2/∂m) are goods x1 and x2 inferior, normal or neither? Assume m=100, p1=0.5 and p2=1. Using the demand function you derived in...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m. 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods. For each of your answers in question 2, write down the consumer...
QUESTION 11 Suppose there are two goods, X1 and x2, and your preferences are represented by...
QUESTION 11 Suppose there are two goods, X1 and x2, and your preferences are represented by the following utility function: , u(x1,x2) = x1/4xz.! The price, P1, for good x1, is 2.5 and the price, P2, for good x2, is 3.5. You have units of money (M) of 60. Compute the consumer's optimal consumption of x1and x2 Enter x1 only here:
d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle...
d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods For each of your answers in question 2, write down...
Q2 For each of the following utility functions, derive the consumer's Marshallian demand functions, 21(P1, P2,...
Q2 For each of the following utility functions, derive the consumer's Marshallian demand functions, 21(P1, P2, B) and x (P1, P2, B), and calculate 11 (income elasticity of good 1), €1 (own-price elasticity of good 1), and €12 (cross-price elasticity). a U(x1, x2) = 21 b U(x1, x2) = 2.925-a for a € (0,1) CU(21, 12) = ln(21) + x2 where B > P2.
Eugenia can consume two goods, good 1 and good 2 where xi and Xz denote the...
Eugenia can consume two goods, good 1 and good 2 where xi and Xz denote the quantity consumed of each good. These goods sell at prices P. and P2, respectively. Eugenia's income is I and her preferences are given by: U(x1, x2) = x2x2 a) Are goods 1 and 2 perfect complements, perfect substitutes or imperfect substitutes to Eugenia? Explain. b) Derive Eugenia's demand functions for the two goods. c) Assume that p1 = P2 = $5 and 7 =...
U = 8x10.5+ 2x2, where x1 is the quantity of good 1 consumed, and x2 is...
U = 8x10.5+ 2x2, where x1 is the quantity of good 1 consumed, and x2 is the quantity of good 2 consumed. (Yes the x is raised) 8x1.5 Suppose that the consumer has a budget of M = $400 to spend and that good 1 has a price of p1= 2, and good 2 has a price of p2= 8. Answer the following questions, and write your answers in the Answer Sheet. Write the person’s budget constraint as an equation,...
Suppose a consumer's optimal consumption of a good is determined by the equation x* = x1(P1, P2, m) where p1 is the price of good 1, p2 is the price of good 2, and m is the consumer's income. If which of the following must be true? (Choose the best answer). O Good one and good 2 are complements Good 1 is not an inferior good O Good 1 is a Giffen good O Good one and good 2 are...
D 16. Suppose a consumer's optimal consumption of a good is determined by the equation ** = x1(P1, P2, m) where pi is the price of good 1, P2 is the price of good 2, and m is the consumer's income. If dx1 Om =-1 which of the following must be true? (Choose the best answer). Good 1 and good 2 are complements Good one is a normal good Good one is an inferior good Good 1 and good 2...
(10 points) Wendy's utility over consumption bundles (x1, x2) is given by u(x1,x2) = VX1 + 21X2. If the price of good 1 is $2/unit, the price of good 2 is $1/unit and income is $120, what is Wendy's optimal consumption of Good 2? (You can use the 5 step method to solve this problem). (10 points) When u(x1, x2) = min ), at prices and income P1, P2, and I, demand for good 1 is given by xi (P1,...
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m. 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods. For each of your answers in question 2, write down the consumer...
QUESTION 11 Suppose there are two goods, X1 and x2, and your preferences are represented by the following utility function: , u(x1,x2) = x1/4xz.! The price, P1, for good x1, is 2.5 and the price, P2, for good x2, is 3.5. You have units of money (M) of 60. Compute the consumer's optimal consumption of x1and x2 Enter x1 only here:
d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods For each of your answers in question 2, write down...
Q2 For each of the following utility functions, derive the consumer's Marshallian demand functions, 21(P1, P2, B) and x (P1, P2, B), and calculate 11 (income elasticity of good 1), €1 (own-price elasticity of good 1), and €12 (cross-price elasticity). a U(x1, x2) = 21 b U(x1, x2) = 2.925-a for a € (0,1) CU(21, 12) = ln(21) + x2 where B > P2.
Eugenia can consume two goods, good 1 and good 2 where xi and Xz denote the quantity consumed of each good. These goods sell at prices P. and P2, respectively. Eugenia's income is I and her preferences are given by: U(x1, x2) = x2x2 a) Are goods 1 and 2 perfect complements, perfect substitutes or imperfect substitutes to Eugenia? Explain. b) Derive Eugenia's demand functions for the two goods. c) Assume that p1 = P2 = $5 and 7 =...
Most questions answered within 3 hours.
-
A lottery exists where balls numbered 1 to 17 are placed in an
urn. To win,...
asked 45 minutes ago -
Please explain steps:
An 80 kg swimmer steps off a platform 10 m above the water...
asked 42 minutes ago -
26) Briefly describe, using words or simple diagrams, the
chemiosmotic theory for coupling oxidation to phosphorylation...
asked 2 hours ago -
Suppose that XX is a random variable with mean 16 and standard
deviation 5 . Also...
asked 3 hours ago -
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 6 hours ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 6 hours ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 7 hours ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 8 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 9 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 9 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 10 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 10 hours ago