A has preferences U(x,y)=x+y and endowment (3,3). B has preferences U(x,y)=y (no typo) and endowment (7,7)....
A has preferences U(x,y)=x+y and endowment (3,3). B has preferences U(x,y)=y (no typo) and endowment (7,7). What is px/py? Enter a number only, round to two decimals.
Homework Answers
Answer is 3/7 = .43
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A has preferences U(x,y)=x+y and endowment (3,3). B has
preferences U(x,y)=y (no typo) and endowment (7,7)....
A and B have identical preferences u(x, y) = min{x,y). A's endowment is (1,9) and B's...
A and B have identical preferences u(x, y) = min{x,y). A's endowment is (1,9) and B's endowment is (19,11). Is (10,10) in the core? A Yes No
Assume an economy with two goods, x and y. A consumer has preferences u(x, y) =...
Assume an economy with two goods, x and y. A consumer has preferences u(x, y) = 2(Vx+ vý), (MU: = 1/VX, MUY = 1/./). Prices are px=1 and py=1. The consumer has an income of M=195.0. Calculate the CV (Compensating Variation) if the price of good x increases to Px'=2. No units, no rounding. Important: Don't round! Leave the numbers under the square root as they are and see if they simplify later without having to round! Do the same...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1 Py + In y. (a) 12 points Derive the Hicksian demands and expenditure function L = Pxx t Py Pe X +Py Ye=m PxX+ Px=m ok: Px - Aco d. Py - X J dy OL:x+ldy) - u zo 1/v/P, P,m) = m-Px + ln o ū= e-Px X (b) 4 points Verify Shephard's Lemma for this consumer. - e-Px ü
Consider preferences over x and y given U(x,y) = min(x,2y) and suppose that income is 60....
Consider preferences over x and y given U(x,y) = min(x,2y) and suppose that income is 60. Let the initial prices be px=1 and py=2. 1. What is the initial optimal consumption? 2. Suppose px increases to px=2. Find the total change in the consumption of x and y. 3. Decompose the total effect into its substitution effect and its income effect. Please do each step of every question for a complete understanding of the reasoning behind the steps.
2. Consider a utility function that represents preferences: u(x,y)= min{80x,40y} Find the optimal values of x...
2. Consider a utility function that represents preferences: u(x,y)= min{80x,40y} Find the optimal values of x and y as a function of the prices px and py with an income level m. (5)
Consumer A has a utility function u(x,y) = xA + yA and an endowment of (x,y)...
Consumer A has a utility function u(x,y) = xA + yA and an endowment of (x,y) = (25,5). Consumer B has a utility function u(x,y) = min{xB,yB} and an endowment (x,y) = (25,45). a. Carefully sketch the Edgeworth Box and indicate where the endowment is. b. What is A’s utility and B’s utility if they each simply consumer their endowments? c. Next, add the indifference curve for A and B, through their endowments in your Edgeworth Box. d. Find a...
Two agents have identical quasilinear preferences U(x, y)-u(x) + y, where , x , x E...
Two agents have identical quasilinear preferences U(x, y)-u(x) + y, where , x , x E [0,1] Agent 1's endowment is (3/2, 1/2) and agent 2's endowment is (1/2, 3/2). Normalize so that the price of good 2 is A) Calculate a Walrasian equilibrium at which the price of good 1 is greater than 1/2. Are there other Walrasian equilibria? B) Suppose agent 1's endowment were (2, 1/2). Find a Walrasian equilibrium for this economy. Note that agent is actually...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose Py, and the consumer has $300 to spend. Draw the Price-Consumption Curve for this consumer for income values Px-1, Px 2, and Px- 5. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by the utility function uA(xA, yA) = xAyA , where xA is the amount of good A consumed by consumer A, and yA is the amount of good Y consumed by consumer A. The preferences of consumer B can be represented by the utility...
7. A consumer has the following utility function for goods X and Y: U(X,Y) 5XY3 +10...
7. A consumer has the following utility function for goods X and Y: U(X,Y) 5XY3 +10 The consumer faces prices of goods X and Y given by px and py and has an income given by I. (5 marks) Solve for the Demand Equations, X (px,py,I) and Y*(px,py,I) a. b. (5 marks) Calculate the income, own-price and cross-price elasticities of demand for X and Y
A and B have identical preferences u(x, y) = min{x,y). A's endowment is (1,9) and B's endowment is (19,11). Is (10,10) in the core? A Yes No
Assume an economy with two goods, x and y. A consumer has preferences u(x, y) = 2(Vx+ vý), (MU: = 1/VX, MUY = 1/./). Prices are px=1 and py=1. The consumer has an income of M=195.0. Calculate the CV (Compensating Variation) if the price of good x increases to Px'=2. No units, no rounding. Important: Don't round! Leave the numbers under the square root as they are and see if they simplify later without having to round! Do the same...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1 Py + In y. (a) 12 points Derive the Hicksian demands and expenditure function L = Pxx t Py Pe X +Py Ye=m PxX+ Px=m ok: Px - Aco d. Py - X J dy OL:x+ldy) - u zo 1/v/P, P,m) = m-Px + ln o ū= e-Px X (b) 4 points Verify Shephard's Lemma for this consumer. - e-Px ü
2. Consider a utility function that represents preferences: u(x,y)= min{80x,40y} Find the optimal values of x and y as a function of the prices px and py with an income level m. (5)
Two agents have identical quasilinear preferences U(x, y)-u(x) + y, where , x , x E [0,1] Agent 1's endowment is (3/2, 1/2) and agent 2's endowment is (1/2, 3/2). Normalize so that the price of good 2 is A) Calculate a Walrasian equilibrium at which the price of good 1 is greater than 1/2. Are there other Walrasian equilibria? B) Suppose agent 1's endowment were (2, 1/2). Find a Walrasian equilibrium for this economy. Note that agent is actually...
2. (24 points) Suppose a consumer has preferences represented by the utility function U(X,Y)- X2Y Suppose Py, and the consumer has $300 to spend. Draw the Price-Consumption Curve for this consumer for income values Px-1, Px 2, and Px- 5. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also, for each bundle that the consumer chooses, draw the indifference curve that goes through...
7. A consumer has the following utility function for goods X and Y: U(X,Y) 5XY3 +10 The consumer faces prices of goods X and Y given by px and py and has an income given by I. (5 marks) Solve for the Demand Equations, X (px,py,I) and Y*(px,py,I) a. b. (5 marks) Calculate the income, own-price and cross-price elasticities of demand for X and Y
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