The utility function of the consumer is u(x1,x2) = (10x1 + x2). e) What is the...

Question

Question

The utility function of the consumer is u(x1,x2) = (10x1 + x2). e) What is the optimal quantity demanded of x, and x2 when pı

Answer 1

Answer #1

Date Utility = (lox + x)² е) fo P At ophinality MRS= Pile 2 (Fox, 4 ҳ/о 2110x, tx2) Since Mux thes Pi 2 consume e only x, 7 M

Answer 2

Similar Homework Help Questions

The utility function of the consumer is u(x1,x2) = (10x1 + x2). a) Plot all the...

The utility function of the consumer is u(x1,x2) = (10x1 + x2). a) Plot all the consumption bundles that gives the consumer utility 100. (3 points) b) Plot all the consumption bundles that gives the consumer utility 144. (3 points) c) Plot the budget constraint when p. = 10,P2 = 10 and m = 100 (3 points) d) Plot the budget constraint when P1 = 20, P2 = 5 and m = 60 (3 points) e) What is the optimal...
Question 1 (20 points). The utility function of the consumer is u(x1, x2) = x1 +...

Question 1 (20 points). The utility function of the consumer is u(x1, x2) = x1 + x2. a) Let pı = 2 ,P2 = 20 and m = 24. Calculate the optimal quantity demanded of good 1 and 2. (7 points) b) Let p1 = 1,P2 = 4 and m = 100. Calculate the optimal quantity demanded of good 1 and 2. (6 points) c) Let P1 = 1, p2 = 4 and m = 4. Compared to point b),...
The utility function of the consumer is u(x1, x2) = VX1 + X2. a) Let P1...

The utility function of the consumer is u(x1, x2) = VX1 + X2. a) Let P1 = 2,P2 = 20 and m = 24. Calculate the optimal quantity demanded of good 1 and 2. (7 points) b) Let p. = 1,P2 = 4 and m = 100. Calculate the optimal quantity demanded of good 1 and 2. (6 points) c) Let P1 = 1,P2 = 4 and m = 4. Compared to point b), by how much would the consumer...

Problem 3 Text: Suppose the utility function of the consumer is u(x1,x2)=min{x1,x2}. Further, suppose pi=$4, P2=$2...

Problem 3 Text: Suppose the utility function of the consumer is u(x1,x2)=min{x1,x2}. Further, suppose pi=$4, P2=$2 and 1=$18. Based on this information, answer the following questions (questions 16-25). Questions: 16. What is the optimal quantity of Good 1 chosen by the consumer? 17. What is the optimal quantity of Good 2 chosen by the consumer? 18. What is the optimal quantity of Good 1 chosen by the consumer if pı decreases to $1?
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...
The consumer has the utility function U(x1 , x2) = (x1-2)4 (x2-3)3

The consumer has the utility function U(x1 , x2) = (x1-2)4 (x2-3)3, subject to her budget constraint 10 = 4x1 + 3x2. Write the utility maximization of this consumer using the Lagrangian method and find the optimal value of x1 and x2.

Suppose a consumer has a utility function U (x1,x2) = Inxi + x2. The consumer takes...

Suppose a consumer has a utility function U (x1,x2) = Inxi + x2. The consumer takes prices (p1 and p2) and income (I) as given 1) Find the demand functions for x1 and x2 assuming -> 1. What is special about Р2 these demand functions? Are both goods normal? Are these tastes homothetic? <1. You probably P2 2) Now find the demand functions for x1 and x2 assuming assumed the opposite above, so now will you find something different. Explain....
Suppose a consumer has a utility function U(x1, x2) = Inxi + x2. The consumer takes...

Suppose a consumer has a utility function U(x1, x2) = Inxi + x2. The consumer takes prices (p1 and p2) and income (I) as given. > 1. What is special about P2 1) Find the demand functions for and x2 assuming these demand functions? Are both goods normal? Are these tastes homothetic? 2) Now find the demand functions for x1 and x2 assuming-<1. You probably P2 assumed the opposite above, so now will you find something different. Explain 3) Graph...
A consumer has utility function: u(x1 , x2 ) = x1 + 2x2 . The consumer...

A consumer has utility function: u(x1 , x2 ) = x1 + 2x2 . The consumer has income m > 0 tospendongood1andgood2. Ifthepriceofx1 isp1 =1andthepriceofx2 isp2 =0.5, then, in order to maximize her utility, the consumer must consume: a) x1 = x2 (b) x1 = 2x2 (c) 2x1 = x2 (d) x1 = 4x2 (e) None of the above

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....