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b) U(X,Y) MIN(3X,2Y). The consumer has $24 to spend and the prices of the goods are...
7. A consumer has the following utility function for goods X and Y: U(X,Y) 5XY3 +10 The consumer faces prices of goods X and Y given by px and py and has an income given by I. (5 marks) Solve for the Demand Equations, X (px,py,I) and Y*(px,py,I) a. b. (5 marks) Calculate the income, own-price and cross-price elasticities of demand for X and Y
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x{y} (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x* (Px. Py,m) and y* (Px.p.m). Show all of your work and circle your final answers. (7...
3 Clara consumes two goods x and y. Suppose her utility function is given as U(x,y)=min{3x,4y} The prices of the two goods are Px for good x and Py for good y. If her monthly income is $M, Derive her uncompensated demand function for good x Derive her uncompensated demand function for good y Derive the cross-price effects and show that the two goods are complementary goods.
Clara consumes two goods x and y. Suppose her utility function is given as U(x,y)=min{3x,4y} The prices of the two goods are Px for good x and Py for good y. If her monthly income is $M, Derive her uncompensated demand function for good x Derive her uncompensated demand function for good y Derive the cross-price effects and show that the two goods are complementary goods.
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.
2) (18 points) For each of the following situations, draw the consumer's budget constraint and indicate the consumer's optimal bundle on the budget constraint. Make sure your graph is accurate and clearly labeled. a) U(X,Y)-X14Y34. The consumer has $24 to spend and the prices of the goods are Px S2 and Py S3. Note that the MUx-(1/4)X-3*Y34 and the MUy (3/4)X14Y-14. b) U(X,Y)-MIN(5X,Y). The consumer has S24 to spend and the prices of the goods are Px S3 and Py...
Consider preferences over x and y given U(x,y) = min(x,2y) and suppose that income is 60. Let the initial prices be px=1 and py=2. 1. What is the initial optimal consumption? 2. Suppose px increases to px=2. Find the total change in the consumption of x and y. 3. Decompose the total effect into its substitution effect and its income effect. Please do each step of every question for a complete understanding of the reasoning behind the steps.
Assume an economy with two goods, x and y. A consumer has preferences u(x, y) = 2(Vx+ vý), (MU: = 1/VX, MUY = 1/./). Prices are px=1 and py=1. The consumer has an income of M=195.0. Calculate the CV (Compensating Variation) if the price of good x increases to Px'=2. No units, no rounding. Important: Don't round! Leave the numbers under the square root as they are and see if they simplify later without having to round! Do the same...
1. Suppose a consumer has the utility function over goods x and y u(x, y) = 3x}}} (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x (Px, py,m) and y* (Px, Py,m). Show all of your work and circle your final...
Suppose you have the following utility function U(X.,Y)-min{2X,Y} Let's assume you have $80 to spend between goods X and Y and the prices are Px 2 and Py -4 Find the utility maximizing consumption level of X and Y. Please show all your work and provide explanations.