Homework Answers
Add Answer to:
2.3 Choice III Consider a consumer whose preference is represented by the utility function where A...
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...
Question: Consider a consumer with utility function4, income Z, and who faces market prices of p,...
Question: Consider a consumer with utility function4, income Z, and who faces market prices of p, and py (a) Use our optimality condition of MRSy MRTay to find the relationship between x and y which must always be satisfied by a bundle that maximizes the consumer's utility (b) After incorporating the consumer's budget to the problem, calculate the consumer's de- mand for x and y which we will call x(P Z) and y(Py, Z), respectively, because it empha- sizes the...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the consumer's demand for good l as a function of prices and income. (b) Draw an Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and P2 = 1. (c) Draw another Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and p2 = 3. (d) Draw...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the price of French fries is pe = $2. You are given the following information about the price of burgers and the number of burgers the consumer will buy at that price: Price of Burgers Quantity of Burgers A B C $1.00 $2.00 $5.00 10 5 2 Use an indifference curve and budget line diagram to draw the consumer's three budget lines and three optimal...
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...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different consumers. Each consumer has $150 to spend (income) and faces prices Px = $2 and Py = $3 for goods X and Y. Consumers I, II, and III have utility functions U'(X, Y) = X? + Y, U"(X, Y) = X12 + Yl2, and UTM(X, Y) = X´Y, respectively. For each consumer, do the following steps. a [15 points] Carefully express the consumer's choice...
Luke's choice behavior can be represented by the utility function u(x1,x2)= x1 + x2
Luke's choice behavior can be represented by the utility function u(x1,x2)= x1 + x2.The prices of x1 and x2 are denoted as p1 and p2, and his income is m. 1. Draw at least three indifference curves and find its slope (i.e. MRS). Is the MRS changing depending on the points of (x1, x2) at which it is evaluated, or constant? 2. Draw a budget constraint assuming that p1 < P2. Find the optimal bundle (x1*,x2*) as a function of income and prices. 3....
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...
24. Consider a consumer with a utility function of u(x,y)=xy. (10 total) a) Draw to scale...
24. Consider a consumer with a utility function of u(x,y)=xy. (10 total) a) Draw to scale the consumer's indifference curves for u(x,y)=100 and u(xy)=400. (2) b) Verify the both x and y are "goods" rather than "bads." (3) c) Verify that the law of diminishing marginal rate of substitution holds. (3) d) Suppose that the utility numbers assigned to bundles are determined by the formula (xy) Vxy, instead of u(x,y)= xy. How does the change in the formula change the...
Suppose a consumer has quasi-linear utility: u(x1, x2) = 3.01 + x2. The marginal utilities are...
Suppose a consumer has quasi-linear utility: u(x1, x2) = 3.01 + x2. The marginal utilities are MU(X) = 2x7"! and MU2:) = 1. Throughout this problem, assume P2 = 1. (a) Sketch an indifference curve for these preferences (label axes and intercepts). (b) Compute the marginal rate of substitution. (c) Assume w> . Find the optimal bundle (this will be a function of pı and w). Why do we need the assumption w> (d) Sketch the demand function for good...
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...
Question: Consider a consumer with utility function4, income Z, and who faces market prices of p, and py (a) Use our optimality condition of MRSy MRTay to find the relationship between x and y which must always be satisfied by a bundle that maximizes the consumer's utility (b) After incorporating the consumer's budget to the problem, calculate the consumer's de- mand for x and y which we will call x(P Z) and y(Py, Z), respectively, because it empha- sizes the...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the consumer's demand for good l as a function of prices and income. (b) Draw an Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and P2 = 1. (c) Draw another Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and p2 = 3. (d) Draw...
A Consumer's Demand for Burgers Suppose that the consumer has income, I = $20, and the price of French fries is pe = $2. You are given the following information about the price of burgers and the number of burgers the consumer will buy at that price: Price of Burgers Quantity of Burgers A B C $1.00 $2.00 $5.00 10 5 2 Use an indifference curve and budget line diagram to draw the consumer's three budget lines and three optimal...
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...
1 [75 points; Chapter 5] You are to solve the consumer choice problem for three different consumers. Each consumer has $150 to spend (income) and faces prices Px = $2 and Py = $3 for goods X and Y. Consumers I, II, and III have utility functions U'(X, Y) = X? + Y, U"(X, Y) = X12 + Yl2, and UTM(X, Y) = X´Y, respectively. For each consumer, do the following steps. a [15 points] Carefully express the consumer's choice...
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...
24. Consider a consumer with a utility function of u(x,y)=xy. (10 total) a) Draw to scale the consumer's indifference curves for u(x,y)=100 and u(xy)=400. (2) b) Verify the both x and y are "goods" rather than "bads." (3) c) Verify that the law of diminishing marginal rate of substitution holds. (3) d) Suppose that the utility numbers assigned to bundles are determined by the formula (xy) Vxy, instead of u(x,y)= xy. How does the change in the formula change the...
Suppose a consumer has quasi-linear utility: u(x1, x2) = 3.01 + x2. The marginal utilities are MU(X) = 2x7"! and MU2:) = 1. Throughout this problem, assume P2 = 1. (a) Sketch an indifference curve for these preferences (label axes and intercepts). (b) Compute the marginal rate of substitution. (c) Assume w> . Find the optimal bundle (this will be a function of pı and w). Why do we need the assumption w> (d) Sketch the demand function for good...
Most questions answered within 3 hours.
-
A) A one-way ANOVA test:
is a left-tailed test
is a right-tailed test
is a two-tailed...
asked 27 minutes ago -
A mixture of nitrogen and carbon
dioxide gases, in a 9.86 L flask at
40 °C,...
asked 1 hour ago -
11) What would be the pH of 100.0 mL of a solution that is 0.040
M...
asked 1 hour ago -
A largely aquatic division of Kingdom Fungi, rarely harmful to
humans, often found as mold/mildew, &...
asked 1 hour ago -
just another way of saying good target marketing and
understanding customer needs? Why or why not?
asked 2 hours ago -
Consider the quantum number sets listed below.
What is the name of the smallest element for...
asked 4 hours ago -
In python,write a function nameSet(first, last) that takes a
person's first and last names as input,...
asked 6 hours ago -
How do you think we should value management? Specifically how
might we try to determine MRPL...
asked 6 hours ago -
Suppose the Central Bank of Turkey starts to pay
interest on reserves. Under what circumstances this...
asked 6 hours ago -
For Bergson the concept of Being contains less reality than does
the concept of Becoming. True...
asked 7 hours ago -
What is the hydroxide ion concentration, [OH-], in a solution
with a hydronium ion concentration, [H3O+]...
asked 7 hours ago -
What species is the reducing agent in the following
equation?
Mg(s) + 2HCl (aq) --> MgCl2(aq)...
asked 7 hours ago