If x > y and y < z, then Group of answer choices x > z...
If x > y and y < z, then
Group of answer choices
x > z
x < z
x ~ z
z < x
it is not possible to say if anything about the consumer’s preference for x relative to z
If x > y and y > z then
Group of answer choices
1.x > z
2.x < z
3.x ~ z
4.z < x or z > x
5.it is not possible to say if anything about the consumer’s preference for x relative to z
If a consumer has a utility function of U = min{x, y}, x and y are:
Group of answer choices
perfect substitutes
the same good
perfect complements
all of the above
none of the above
Homework Answers
Answer 1: option 5: it is not possible to if anything about the consumer's preference for x relative to z
Answer 2: option 1: x>z. it assumes that the concept of transitivity holds true.
Answer 3: option 3: perfect complements. this is because both the goods should be consumed in equal quantities to maintain utility levels.
For each of these utility functions, find the optimal consumption choices z" and y" for a...
For each of these utility functions, find the optimal consumption choices z" and y" for a consumer with budget w = 1, who faces prices pr-0.05 and Py 0.3. Are the goods substitutes or complements, or neither (no need to show a calculation for this part)? (i) u (x, y) (ii) u (z, y) +2y min {x, 2y
Consider the following utility function of 3 goods, x, y and z: U(x,y,z)=ax+by+cz; x,y,z≥0 and a,...
Consider the following utility function of 3 goods, x, y and z: U(x,y,z)=ax+by+cz; x,y,z≥0 and a, b, c are constants. The prices of good x and y is denoted by pX and pY respectively. The income is denoted by m. Good z is provided by the government free of cost but the quantity of good z provided by the government depends on the consumption of good x and y chosen by the consumer. For example, if in equilibrium, the consumer...
QUESTION 30 When you observe downward sloping straight line indifference curves, what do you automatically know?...
QUESTION 30 When you observe downward sloping straight line indifference curves, what do you automatically know? That the MRS is constant. That the consumer views the two goods as perfect substitutes. DODO That the consumer views the two goods as imperfect substitutes. That the consumer views the two goods as perfect complements That the utility function is generally written as U(X ) = ax + by, where a and b are positive constants. That the utility function is generally written...
4. A consumer’s utility function is U = x + z . If the budget constraint...
4. A consumer’s utility function is U = x + z . If the budget constraint has a slope ( − px / pz ) = -2, which statement is true? a. z* >0,x* =0 b. z* = x* > 0 c. z* =0,x* >0 d. Not possible to say, given the information provided. e. None of the above.
2. Consider a consumer with the utility function ility function U(x, y)= min{3x, 5 y} that...
2. Consider a consumer with the utility function ility function U(x, y)= min{3x, 5 y} that is ,J)= min (3x, that is, the two goods are perfect complements in ratio 3:5. The prices of the two goods are andy , and the consumer's income is $220. Determine the optimum consumption basket.
Suppose a consumer views two goods, X and Y, as perfect complements. Her utility function is...
Suppose a consumer views two goods, X and Y, as perfect complements. Her utility function is given by U = MIN [2X, Y]. Sketch the graph of the consumers indifference curve that goes through the bundle X = 7 and Y = 8. Put the amount of Y on the vertical axis, and the amount of X on the horizontal axis. Which of the three assumptions that we made about consumer preferences is violated in this case?
1. True or False, and explain briefly. 1) The assumption that more is better implies that...
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
QUESTION 31 When you observe downward sloping, convex indifference curves, what do you automatically know? That...
QUESTION 31 When you observe downward sloping, convex indifference curves, what do you automatically know? That the MRS in absolute value is diminishing. That the utility function is generally written as U(x,y) = ax + by, where a and b are positive constants. That the consumer views the two goods as imperfect substitutes. That the utility function is generally written as U(X,Y) = minax,by), where a and b are positive constants. That the utility function is generally written as U(X,Y)...
1. Consumer’s utility function is: U (X,Y) = 10X + Y. Consumer’s income M is 40...
1. Consumer’s utility function is: U (X,Y) = 10X + Y. Consumer’s income M is 40 euros, the price per unit of good X (i.e. Px ) is 5 euros and the price per unit of good Y (i.e. Py) is 1 euro. a) What is the marginal utility of good X (MUx) for the consumer? ( Answer: MUx = 10) b) What is the marginal utility of good Y (MUy) for the consumer? ( Answer: MUy = 1) c)...
17. Which statement is true? a. Diminishing marginal utility is equivalent to diminishing MRS2 1 → (where MRS2 1 → is de...
17. Which statement is true? a. Diminishing marginal utility is equivalent to diminishing MRS2 1 → (where MRS2 1 → is defined as the marginal rate of substitution of good 2 for good 1, in the usual manner). b. A consumer has diminishing MRS2 1 → if goods 1 and 2 are perfect substitutes. c. If two goods are perfect complements, a consumer will have diminishing MRS2 1 → . d. If a consumer has monotonic and strictly convex preference,...
For each of these utility functions, find the optimal consumption choices z" and y" for a consumer with budget w = 1, who faces prices pr-0.05 and Py 0.3. Are the goods substitutes or complements, or neither (no need to show a calculation for this part)? (i) u (x, y) (ii) u (z, y) +2y min {x, 2y
QUESTION 30 When you observe downward sloping straight line indifference curves, what do you automatically know? That the MRS is constant. That the consumer views the two goods as perfect substitutes. DODO That the consumer views the two goods as imperfect substitutes. That the consumer views the two goods as perfect complements That the utility function is generally written as U(X ) = ax + by, where a and b are positive constants. That the utility function is generally written...
2. Consider a consumer with the utility function ility function U(x, y)= min{3x, 5 y} that is ,J)= min (3x, that is, the two goods are perfect complements in ratio 3:5. The prices of the two goods are andy , and the consumer's income is $220. Determine the optimum consumption basket.
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
QUESTION 31 When you observe downward sloping, convex indifference curves, what do you automatically know? That the MRS in absolute value is diminishing. That the utility function is generally written as U(x,y) = ax + by, where a and b are positive constants. That the consumer views the two goods as imperfect substitutes. That the utility function is generally written as U(X,Y) = minax,by), where a and b are positive constants. That the utility function is generally written as U(X,Y)...
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