7. Lori has the following utility function U = X0.5Y0.5 MUx = 0.5 X-0.5Y0.5 MUy =...
7. Lori has the following utility function U = X0.5Y0.5 MUx = 0.5 X-0.5Y0.5 MUy = 0.5 X0.5Y-0.5
A.) Calculate Lori’s optimal consumption bundle when Px = Py = 10 given a budget of 200
B.)Calculate Lori’s optimal consumption bundle if Px = 5, other things equal
C.) Derive Lori’s demand for good X assuming it is linear.
Homework Answers
![Gos xos yotas jo → 41 31275x) Put 24 = x Pn ego ③ we wel. > 5(24) + loy - 200 > y=10] *2.2 y 322110) >X220 The optimal Bund](http://img.homeworklib.com/questions/4f101660-7a16-11ea-aeb2-11f0d8c5b041.png?x-oss-process=image/resize,w_560)
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7. Lori has the following utility function U = X0.5Y0.5 MUx =
0.5 X-0.5Y0.5 MUy =...
Suppose that a consumer’s utility function is U=xy with MUx=y and MUy=x. Suppose the consumer‘s income...
Suppose that a consumer’s utility function is U=xy with MUx=y and MUy=x. Suppose the consumer‘s income is $480. For this question you may need to use the following approximations: sqrt(2) is approximately 1.4, sqrt(3) is approx. 1.7 and sqrt(5) is approx 2.2. a) Initially, the price of y is $4 and the price of x is $6. What is the consumer’s optimal bundle? b) What is the consumer's initial utility? Now suppose that price of x increases to $8 and...
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X...
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Suppose that a consumer’s utility function is U(x,y)=xy＋10y. the marginal utilities for this utility function are...
Suppose that a consumer’s utility function is U(x,y)=xy＋10y. the marginal utilities for this utility function are MUx=y and MUy=x＋10. The price of x is Px and the price of y is Py, with both prices positive. The consumer has income I. (this problem shows that an optimal consumption choice need not be interior, and may be at a corner point.) Assume first that we are at an interior optimum. Show that the demand schedule for x can be written as...
True or False. 1. If MUX/PX > MUY/Py at the best affordable bundle with goods X...
True or False.
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(Use this information to answer a, b, c below) Suppose Mary’s utility function for two goods...
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a) Graph the indifference curve for U 25 b) Derive the MUx and MUy c) Derive the MRSy d) Calculate the MRSxy for the following utility function: U(x,y) (ry)12
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Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r...
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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...
True or False.
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a) Graph the indifference curve for U 25 b) Derive the MUx and MUy c) Derive the MRSy d) Calculate the MRSxy for the following utility function: U(x,y) (ry)12
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