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![Q), 4(B,0) = (B+2) (0+1), (a) u (2,8) = (2+2) (8+1) = 4x9 = 36 9c: (B+2) (0+1) = 36. ©+1) = 3672 0 - 3 4 -1 ] o Iceq 6 Po=Pb=](http://img.homeworklib.com/questions/c964dc10-79ef-11ea-ad2b-f988f024e384.png?x-oss-process=image/resize,w_560)
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1. Dorothy's utility function is U(B, O) = (B + 2) (0 + 1) where B...
Diana's utility function for consuming apples (Xa) and Bananas (Xb) is U(Xa,Xb) = XaXb. Suppose the...
Diana's utility function for consuming apples (Xa) and Bananas (Xb) is U(Xa,Xb) = XaXb. Suppose the prices of apples is $1, bananas $2, and her income is $40. On a graph with bananas on the y-axis, use blue ink to draw Bianca’s budget line.With red ink, plot an indifference curve that gives her a utility level of 150. Using black ink, plot an indifference curve that gives her a utility level of 300. Can Bianca afford any bundles that give...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has standard preferences. Her budget constraint is given by the equation 1000-2a-2b0. Apples are normal goods and bananas are normal. a) plot the optimal bundle, showing the proper indifference curve and budget constraint. Call this bundle x1 b) show the effect of an increase of a single price increase for apples on the budget constraint. Use a hypothetical budget line to identify substitution effects for...
1. Clara's utility function is U(X,Y)= (x + 2)(Y +1). a) Write an equation for Clara's...
1. Clara's utility function is U(X,Y)= (x + 2)(Y +1). a) Write an equation for Clara's indifference curve that goes through the point(X,Y)-(2,8). b) Suppose that the price of each good is one and that Clara has an income of 11. Write an equation that describes her budget constraint. c) Find an equation the describes Clara's MRS for any given commodity bundle (X,Y). d) Use the equations in parts b) and e) to solve for Clara's optimal bundle Hint use...
Question 1: Households A household's utility over consumption C and leisure l is U - U(C,0)...
Question 1: Households A household's utility over consumption C and leisure l is U - U(C,0) Cl 1. Plot the household's indifference curve for U-80 for values of C andlless than 20 (i.e. find the curve containing all combinations of C and ( such that U(C, 0) 80) The household has a time endowment of h=16 hours per day. The wage rate per hour is w 1.25. The household's labour income is therefore wNs, where N-h-l-16- l is the time...
Marge has the utility function U(F,H)=20F2H where F is the quantity of footwear and H...
Marge has the utility function U(F,H)=20F2H where F is the quantity of footwear and H is the quantity of hats she consumes. Suppose the price of footwear is $20 and the price of hats is $5, while Marge has an income of $200/week. Calculate Marge's MRS as a function of the quantities F and H. (2 points) BONUS: Write down the Lagrangian function for Marge's utility maximization problem. (2 points) Solve for Marge's optimal consumption bundle of footwear and...
Question 2: Lorelai's choice behavior can be represented by the utility function u(x1, 2)0.9Inx)0.1x2 The prices...
Question 2: Lorelai's choice behavior can be represented by the utility function u(x1, 2)0.9Inx)0.1x2 The prices of both x1 and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set but at least linear in good x2) the preferences and parameters accordingly as given in the question. Click...
Lorelai's choice behavior can be represented by the utility function u(x1, 2) 0.9n(x)0.1x2. The prices of...
Lorelai's choice behavior can be represented by the utility function u(x1, 2) 0.9n(x)0.1x2. The prices of both xi and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, but at least linear in good x2) 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set the preferences and parameters accordingly as given in the question. Click on...
Homework 3 Chapter 5: Demand 1. What happens to the amount of x and y consumed...
Homework 3 Chapter 5: Demand 1. What happens to the amount of x and y consumed when income falls if x and y are normal goods? Draw a budget constraint (before the income decrease) and a convex utility curve that corresponds to the optimal consumption bundle. Draw a new budget constraint (after income falls) and a new convex utility curve that corresponds to the optimal consumption bundle. Has the amount of x and y consumed increased or decreased due to...
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X...
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X is MUx = Y. His marginal utility of Y is MUY = . He has income $12. When the prices are Px - 1 and Py -1, Andy's optimal consumption bundle is X* -6 and Y' = 6. When the prices are Px = 1 and P, = 4, Andy's optimal consumption bundle is X** = 6 and Y* 1.5. Suppose the price of...
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of...
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of good 1 and good 2 are p1 = P2 = 4. The consumer's income is m = 120. (a) Find the consumer's preferred bundle. (b) Draw the consumer's budget line. (c) On the same graph, indicate the consumer's preferred bundle and draw the indifference curve through it. (d) Now suppose that the consumer gets a discount on good 1: each unit beyond the 4th...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has standard preferences. Her budget constraint is given by the equation 1000-2a-2b0. Apples are normal goods and bananas are normal. a) plot the optimal bundle, showing the proper indifference curve and budget constraint. Call this bundle x1 b) show the effect of an increase of a single price increase for apples on the budget constraint. Use a hypothetical budget line to identify substitution effects for...
1. Clara's utility function is U(X,Y)= (x + 2)(Y +1). a) Write an equation for Clara's indifference curve that goes through the point(X,Y)-(2,8). b) Suppose that the price of each good is one and that Clara has an income of 11. Write an equation that describes her budget constraint. c) Find an equation the describes Clara's MRS for any given commodity bundle (X,Y). d) Use the equations in parts b) and e) to solve for Clara's optimal bundle Hint use...
Question 1: Households A household's utility over consumption C and leisure l is U - U(C,0) Cl 1. Plot the household's indifference curve for U-80 for values of C andlless than 20 (i.e. find the curve containing all combinations of C and ( such that U(C, 0) 80) The household has a time endowment of h=16 hours per day. The wage rate per hour is w 1.25. The household's labour income is therefore wNs, where N-h-l-16- l is the time...
Question 2: Lorelai's choice behavior can be represented by the utility function u(x1, 2)0.9Inx)0.1x2 The prices of both x1 and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set but at least linear in good x2) the preferences and parameters accordingly as given in the question. Click...
Lorelai's choice behavior can be represented by the utility function u(x1, 2) 0.9n(x)0.1x2. The prices of both xi and x2 are $5 and she has an income of $40. 1. What preference does this utility function represent? (Hint: the utility is function is not linear, but at least linear in good x2) 2. Drawinwg indifference curves: you can copy down the graph on your paper using econgraphs. Set the preferences and parameters accordingly as given in the question. Click on...
Homework 3 Chapter 5: Demand 1. What happens to the amount of x and y consumed when income falls if x and y are normal goods? Draw a budget constraint (before the income decrease) and a convex utility curve that corresponds to the optimal consumption bundle. Draw a new budget constraint (after income falls) and a new convex utility curve that corresponds to the optimal consumption bundle. Has the amount of x and y consumed increased or decreased due to...
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X is MUx = Y. His marginal utility of Y is MUY = . He has income $12. When the prices are Px - 1 and Py -1, Andy's optimal consumption bundle is X* -6 and Y' = 6. When the prices are Px = 1 and P, = 4, Andy's optimal consumption bundle is X** = 6 and Y* 1.5. Suppose the price of...
Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of good 1 and good 2 are p1 = P2 = 4. The consumer's income is m = 120. (a) Find the consumer's preferred bundle. (b) Draw the consumer's budget line. (c) On the same graph, indicate the consumer's preferred bundle and draw the indifference curve through it. (d) Now suppose that the consumer gets a discount on good 1: each unit beyond the 4th...
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