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Assume an economy with two goods, x and y. A consumer has preferences u(x, y) =...
(b) You consume two goods, good x and good y. These goods sell at prices px...
(b) You consume two goods, good x and good y. These goods sell at prices px = 1 and py = 1, respectively. Your preferences are represented by the following utility function: U(x; y) = x + ln(y): You have an income of m = 100. How many units of x and y will you buy and what will is your utility? If px increases from $1 to $2; figure out the compensating variation (CV) associated with price change. (c)...
Consumer Theory 13 Ordinary Goods 1. Let U(x, y) = x2/3743, MU2 = 173 MUY =...
Consumer Theory 13 Ordinary Goods 1. Let U(x, y) = x2/3743, MU2 = 173 MUY = 2 x 5 Pa = 6, Py = 3, and M = 30. 2. Let U(x, y) = x2/3y1/3, MUX 17, MUY Px = 6, Py = 3, and M - 30. 3. Let U(x, y) = 2x1/3y2/3, MU, = 2 21/a, Px = 6, Py = 3, and M = 30. 4. Let U(x, y) = 2x4 3y1/3, MUx = * * 78,...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1 Py + In y. (a) 12 points Derive the Hicksian demands and expenditure function L = Pxx t Py Pe X +Py Ye=m PxX+ Px=m ok: Px - Aco d. Py - X J dy OL:x+ldy) - u zo 1/v/P, P,m) = m-Px + ln o ū= e-Px X (b) 4 points Verify Shephard's Lemma for this consumer. - e-Px ü
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by the utility function uA(xA, yA) = xAyA , where xA is the amount of good A consumed by consumer A, and yA is the amount of good Y consumed by consumer A. The preferences of consumer B can be represented by the utility...
An exchange economy consists of two individuals---consumer A and consumer B with preferences over two goods---goods...
An exchange economy consists of two individuals---consumer A and consumer B with preferences over two goods---goods X and Y. Suppose consumer A is initially endowed with 9 units of good X and 6 units of good Y and consumer B is initially endowed with 91 units of good X and 14 units of good Y. Both consumer A and consumer B have identical preferences with the following marginal rates of substitution: MUX - 1 YA MRS, = MUX - and...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by...
Description of the economy: For each of the following problems, consider a 2x2 Exchange Economy with two consumers A and B, and two goods X and Y . The preferences of consumer A can be represented by the utility function uA(xA, yA) = xAyA , where xA is the amount of good A consumed by consumer A, and yA is the amount of good Y consumed by consumer A. The preferences of consumer B can be represented by the utility...
A has preferences U(x,y)=x+y and endowment (3,3). B has preferences U(x,y)=y (no typo) and endowment (7,7)....
A has preferences U(x,y)=x+y and endowment (3,3). B has preferences U(x,y)=y (no typo) and endowment (7,7). What is px/py? Enter a number only, round to two decimals.
Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's...
Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's utility function is given by: Ua(X,Y) = X*Y^3 Consumer B's utility function is given by: Ub (X,Y) = X*Y Marginal Utilities for A: MUx =Y^3 , MUy = 3X*Y^2 Marginal Utilities for B: MUx = Y, MUy = X Initial endowments: Person A has 40 units of good X and 20 units of good Y Person B has 30 units of good x and...
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...
7. A consumer has the following utility function for goods X and Y: U(X,Y) 5XY3 +10...
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
Consumer Theory 13 Ordinary Goods 1. Let U(x, y) = x2/3743, MU2 = 173 MUY = 2 x 5 Pa = 6, Py = 3, and M = 30. 2. Let U(x, y) = x2/3y1/3, MUX 17, MUY Px = 6, Py = 3, and M - 30. 3. Let U(x, y) = 2x1/3y2/3, MU, = 2 21/a, Px = 6, Py = 3, and M = 30. 4. Let U(x, y) = 2x4 3y1/3, MUx = * * 78,...
P X Y = + MRS= 19. Consider a consumer with preferences: u(x,y) = Ý 1 Py + In y. (a) 12 points Derive the Hicksian demands and expenditure function L = Pxx t Py Pe X +Py Ye=m PxX+ Px=m ok: Px - Aco d. Py - X J dy OL:x+ldy) - u zo 1/v/P, P,m) = m-Px + ln o ū= e-Px X (b) 4 points Verify Shephard's Lemma for this consumer. - e-Px ü
An exchange economy consists of two individuals---consumer A and consumer B with preferences over two goods---goods X and Y. Suppose consumer A is initially endowed with 9 units of good X and 6 units of good Y and consumer B is initially endowed with 91 units of good X and 14 units of good Y. Both consumer A and consumer B have identical preferences with the following marginal rates of substitution: MUX - 1 YA MRS, = MUX - and...
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...
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
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