Jake spends $100/week on two goods, apples and DVD's. Th price of an apple is $2...
Jake spends $100/week on two goods, apples and DVD's. Th price of an apple is $2 and the price of a DVD is $10. Show Jake's budget constraint. Be clear about the values of the two intercepts on the budget constraint. Put the quantity of apples on the horizontal axis.
a. Assume Jake is consuming 20 apples and spends the rest on DVDs. Label that point on your graph as point A.
b. Jake has well-behaved preferences. At his initial consumption bundle, his marginal utility of apples is 10 and his marginal utility of DVDs is 40. Given the information concerning Jake's preferences, show an indifference curve through point A. Explain why you drew it this way.
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Jake spends $100/week on two goods, apples and DVD's. Th price
of an apple is $2...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has standard preferences. Her budget constraint is given by the equation 1000-2a-2b0. Apples are normal goods and bananas are normal. a) plot the optimal bundle, showing the proper indifference curve and budget constraint. Call this bundle x1 b) show the effect of an increase of a single price increase for apples on the budget constraint. Use a hypothetical budget line to identify substitution effects for...
4. Charlie likes both apples and bananas. He consumes nothing else. Charlie consumes x bushels of apples per year...
4. Charlie likes both apples and bananas. He consumes nothing else. Charlie consumes x bushels of apples per year and x bushels of bananas per year. Suppose that Charlie's preference is represented in the following utility function: u(x,,Xy)-x,Xy . Suppose that the price of apples is S1, the price of bananas is S2, and Charlie's income is $40. (14 points) a. Draw Charlie's budget line. Plot a few points on the indifference curve that gives Charlie a utility of 150...
. (15 marks) Rajan spends all his money on only two goods, bananas and scones. Bananas...
. (15 marks) Rajan spends all his money on only two goods, bananas and scones. Bananas cost $0.60/kg, and scones $0.50 each (assume he can purchase partial scones). (1) Sketch Rajan's budget constraint if he has an income of $20/day. (Put bananas on the horizontal axis.) Rajan has well-behaved preferences[1], and his optimal bundle contains 20 scones. b) (2) Illustrate his optimal bundle in your diagram for (a); label it A. Why is this choice optimal? What conditions does it satisfy? (2)...
If pA = $10, PB = $5,Y = $75, where p is the price of a...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
2. Todd earns $100/week, and spends all of his money on coffee and pizza. Coffee costs...
2. Todd earns $100/week, and spends all of his money on coffee and pizza. Coffee costs $5/cup and pizza costs $3/slice. He initially consumes 8 cups of coffee and 20 slices of pizza per week. a) Draw Todd's budget constraint and the indifference curve on which he is currently consuming b) the cost of coffee decreases to 2.50/ cup and pizza increases in price to $4/slice. Draw Todd's new budget constraint c) Is Todd better off or worse off? Explain.
Thor Odinson has really let himself go. He spends all of his income only consuming whole...
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza () and cases of beer (b), priced at p. 5 and p = 15, respectively. Suppose Thor's utility funetion is given by u(3,0) = 2'and his income is I = 300. (8 points total) (a) Salve for Thor's optimal bundle of pizza pies (?) and cases of beer (b). (2 points) (1) Draw Thor's budget constraint, optimal bundle, and indifference curve...
Thor Odinson has really let himself go. He spends all of his income only consuming whole...
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza (2) and cases of beer (b), priced at p: = 5 and p = 15, respectively. Suppose Thor's utility function is given by u(2,5) = 36 and his income is I = 300. (8 points total) (a) Solve for Thor's optimal bundle of pizza pies (2) and cases of beer (b). (2 points) (b) Draw Thor's budget constraint, optimal bundle, and...
14. Suppose Jack has an income of $12 to buy two goods: sandwiches and sodas. The...
14. Suppose Jack has an income of $12 to buy two goods: sandwiches and sodas. The price of a bottle of soda is $1, and the price of a sandwich is $2. Draw Jack’s budget line (BL1) given his income is $12. (Measure sodas on the X-axis and sandwiches on the Y-axis.) Assume Jack’s utility function is U(x,y)=xy (x is the consumption amount of sodas and y is the consumption amount of sandwiches). Jack’s marginal utility of consuming sodas and...
Thor Odinson has really let himself go. He spends all of his income only consuming whole...
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza (2) and cases of beer (b), priced at p. = 5 and p = 15, respectively. Suppose Thor's utility function is given by u( 2, b) = 2?? and his income is I = 300. (8 points total) (a) Solve for Thor's optimal bundle of pizza pies (2) and cases of beer (b). (2 points) (b) Draw Thor's budget constraint, optimal...
4. consider the following utility functions a) for each of these utility function what is the equation of an indifferenc...
4. consider the following utility functions
a) for each of these utility function what is the equation of an
indifference curve ?
c) for each utility function show weather the function exhibits
the diminishing rate of substitution property
d) do the above utility function represent the same preference
ordering? why or why not?
c) Suppose the price of beer doubles, but the price of pizza and Tom's income stay the same. How much beer is Tom consuming as a percentage...
1. Suppose a consumer is maximizing utility consuming a bundle apples and bananas x and has standard preferences. Her budget constraint is given by the equation 1000-2a-2b0. Apples are normal goods and bananas are normal. a) plot the optimal bundle, showing the proper indifference curve and budget constraint. Call this bundle x1 b) show the effect of an increase of a single price increase for apples on the budget constraint. Use a hypothetical budget line to identify substitution effects for...
4. Charlie likes both apples and bananas. He consumes nothing else. Charlie consumes x bushels of apples per year and x bushels of bananas per year. Suppose that Charlie's preference is represented in the following utility function: u(x,,Xy)-x,Xy . Suppose that the price of apples is S1, the price of bananas is S2, and Charlie's income is $40. (14 points) a. Draw Charlie's budget line. Plot a few points on the indifference curve that gives Charlie a utility of 150...
If pA = $10, PB = $5,Y = $75, where p is the price of a good, A and B are goods, and Y is income. Given that the utility function is U = 25A2B, determine the optimal bundle of x and yfor this consumer. Be sure to show your work and box your answers. a) Solve for the marginal utility of A and the marginal utility of B b) Solve for the relationship (trade-off) between A and B c)...
2. Todd earns $100/week, and spends all of his money on coffee and pizza. Coffee costs $5/cup and pizza costs $3/slice. He initially consumes 8 cups of coffee and 20 slices of pizza per week. a) Draw Todd's budget constraint and the indifference curve on which he is currently consuming b) the cost of coffee decreases to 2.50/ cup and pizza increases in price to $4/slice. Draw Todd's new budget constraint c) Is Todd better off or worse off? Explain.
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza () and cases of beer (b), priced at p. 5 and p = 15, respectively. Suppose Thor's utility funetion is given by u(3,0) = 2'and his income is I = 300. (8 points total) (a) Salve for Thor's optimal bundle of pizza pies (?) and cases of beer (b). (2 points) (1) Draw Thor's budget constraint, optimal bundle, and indifference curve...
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza (2) and cases of beer (b), priced at p: = 5 and p = 15, respectively. Suppose Thor's utility function is given by u(2,5) = 36 and his income is I = 300. (8 points total) (a) Solve for Thor's optimal bundle of pizza pies (2) and cases of beer (b). (2 points) (b) Draw Thor's budget constraint, optimal bundle, and...
Thor Odinson has really let himself go. He spends all of his income only consuming whole pies of pizza (2) and cases of beer (b), priced at p. = 5 and p = 15, respectively. Suppose Thor's utility function is given by u( 2, b) = 2?? and his income is I = 300. (8 points total) (a) Solve for Thor's optimal bundle of pizza pies (2) and cases of beer (b). (2 points) (b) Draw Thor's budget constraint, optimal...
4. consider the following utility functions
a) for each of these utility function what is the equation of an
indifference curve ?
c) for each utility function show weather the function exhibits
the diminishing rate of substitution property
d) do the above utility function represent the same preference
ordering? why or why not?
c) Suppose the price of beer doubles, but the price of pizza and Tom's income stay the same. How much beer is Tom consuming as a percentage...
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