9) What are the components (px, py and p.) of vector p if p = nxm...
u(x,y)= x+3y,INCOME=12;px =1,py =2;p′x =1,p′y =4 initial prices px,py and final prices p′x,p′y. For THE problem, you are to find: (a) the optimal choice at the initial prices (b) the optimal choice at the final prices (c) the change = optimal choice at final prices - optimal choice at initial prices (d) the income effect and the substitution effect
Suppose Qxd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000. (Note that Qdx is the quantity demanded of Good X, Px is the price of Good X, Py is the price of another product called Good Y, and M stands for income available.) Use this information to answer the following three parts of question 6. a. For this demand equation, what is the P intercept? b. For...
Let P = (Px, Py) be the point on the unit circle (given by x2+y2=1) in the first quadrant which maximizes the function f(x,y) = 4x+ y. Find Py?. Pick one of the choices O 1/5 O 1/9 O 1/13 O 1/17
4. A group of economists has carefully estimated demand for electric cars as follows: x(px, py, m)-8m +4py-px; x represents electric cars, m is income, and y represents gas-powered cars. Suppose that m=2 and py-2. (a) What is the inverse demand function for electric cars? (b) If m increases to 3 and py remains constant, what is the new inverse demand function? (c) Draw both the inverse demand functions (x horizontal and px vertical axis).
(a) 1.2 (10 mks each). In parts a) and b) below, assume px = $1, Py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: U= xy?, x, y 2 0; (b) U = x1/3y2/3, x, y = 0; now, let px = P, Py = $5, I = $21, find the u-max solution for U = xy?, x, y 2 0; let px = 1, Py =p, I =...
1.2 (10 mks each). In parts a) and b) below, assume px = $1, py = $5, I = income = $21. Solve the U-max problem for each of the following two utility functions: (a) U = xy?, x, y = 0; (b) U=x1/3y2/3, x, y 2 0; (c) now, let px = p, Py = $5, 1 = $21, find the u-max solution for U = xy?, x, y = 0; (d) let px = 1, Py = p,...
The inverse demand curve for product x is given by px=20−4·qx+2·py where px represents the price in dollars per unit, qx represents the rate of sales in pounds per week, and py represents the selling price of another product y in dollars per unit. The inverse supply curve of product x is given by px=10+2·qx Determine the equilibrium price and sales of X Let py=$10. Determine whether x and y are substitutes or complements
The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. a. Indicate whether goods Y and Z are substitutes or complements for good X b. Is X an inferior or a normal good? c. How many units of good X...
Consider the following individual (indirect) expenditure function: E(px, py, U) = 2(px py U)1/2. At price px = 20, py = 40 and U = 200, the quantity demand xc (on this individual compensated demand curve) is [xc]. Hint: Use the Shephard lemma to derive this individual compensated demand function.
Given a utility function U(x,y) = xy. The price of x is Px, while the price of y is Py. The income is I. Suppose at period 0, Px = Py = $1 and income = $8. At period 1, price of x (Px) is changed to $4. Compute the price effect, substitution effect, and income effect for good x from the price change.