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3. Michael has preferences over two goods, z1 and r2, represented by the utility function (a)...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3 A. Let Income 1200, PE 2 and PH6. Find the quantity demanded of housing and food. Graph the budget constraint and the optimal bundle that you found. Make sure to include an indifference curve. Let the price of food increase to 4. Add the new budget constraint, find the new optimal bundle and add it to your graph. B.
4. An individual has preferences over two goods (x and y) that are represented by function...
4. An individual has preferences over two goods (x and y) that are represented by function U = min{x,y}. The individual has income $60, the price of x is $4 and the price of good y is $2. (a) What kind of goods are these to the individual? (i.e. what "special case” is this?) (b) What is this individual's budget constraint? (c) What is this individual's optimal bundle of x and y? [HINT: You can't take the derivative of this...
1. Sally has preferences represented by the utility function UC, M) = 3 + 61rC M, where C is coffee and M is meals....
1. Sally has preferences represented by the utility function UC, M) = 3 + 61rC M, where C is coffee and M is meals. Her income is S100, and she pays $2 per coffee and S10 per meal a. Distinguish (the concepts of) diminishing marginal rate of substitution from diminishing marginal uty Your answer does not have to be specific to Sally's preferences. (4 points) Use the Lagrangian method to derive Sally's utility maximizing bundle given her budget constraint. Circle...
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...
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....
Lorelai's choice behavior can be represented by the utility function 11(xi, X2) = 0.91n(xi) + 0.1x2...
Lorelai's choice behavior can be represented by the utility function 11(xi, X2) = 0.91n(xi) + 0.1x2 The prices of both x 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...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r, y)- .5,2 where denotes the quantity of good X and y denotes the quantity of good Y. The current market price for X is px 10 while the market price for Y is Pr = $5. Sally's current income is $500. (a) Write the expression for Sally's budget constraint. (1 point) (b) Find the optimal consumption bundle that Sally will...
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...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the indifference curves for u = 50, 72 and 98. e indifference Carved forbise banta un b. Sketch budget constraint of 5x +10y = 30. Label intercepts (where it crosses the axes). 00:0 VE c. Solve for calculate) the optimal bundle (x, y) and sketch the optimal solution.
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...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3 A. Let Income 1200, PE 2 and PH6. Find the quantity demanded of housing and food. Graph the budget constraint and the optimal bundle that you found. Make sure to include an indifference curve. Let the price of food increase to 4. Add the new budget constraint, find the new optimal bundle and add it to your graph. B.
4. An individual has preferences over two goods (x and y) that are represented by function U = min{x,y}. The individual has income $60, the price of x is $4 and the price of good y is $2. (a) What kind of goods are these to the individual? (i.e. what "special case” is this?) (b) What is this individual's budget constraint? (c) What is this individual's optimal bundle of x and y? [HINT: You can't take the derivative of this...
1. Sally has preferences represented by the utility function UC, M) = 3 + 61rC M, where C is coffee and M is meals. Her income is S100, and she pays $2 per coffee and S10 per meal a. Distinguish (the concepts of) diminishing marginal rate of substitution from diminishing marginal uty Your answer does not have to be specific to Sally's preferences. (4 points) Use the Lagrangian method to derive Sally's utility maximizing bundle given her budget constraint. Circle...
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...
Lorelai's choice behavior can be represented by the utility function 11(xi, X2) = 0.91n(xi) + 0.1x2 The prices of both x 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...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r, y)- .5,2 where denotes the quantity of good X and y denotes the quantity of good Y. The current market price for X is px 10 while the market price for Y is Pr = $5. Sally's current income is $500. (a) Write the expression for Sally's budget constraint. (1 point) (b) Find the optimal consumption bundle that Sally will...
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...
4. Assume a utility function described by u(x,y)=2/xy. a. Given the utility function, u(x,y)=2xy, sketch the indifference curves for u = 50, 72 and 98. e indifference Carved forbise banta un b. Sketch budget constraint of 5x +10y = 30. Label intercepts (where it crosses the axes). 00:0 VE c. Solve for calculate) the optimal bundle (x, y) and sketch the optimal solution.
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...
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