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Suppose the consumer's utility from consuming goods X and Y is U = X0.4 y1 -0.4,...
1. (24 total points) Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also,...
1. (24 total points) Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also, the consumer has $72 to spend, and the price of Good X, PX = $4. Let Good Y be a composite good whose price is PY = $1. So on the Y-axis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X. a) (2 points) How much X and Y...
) A consumer's utility function is given by: U(x,y) = 10xy Currently, the prices of goods x and y...
) A consumer's utility function is given by: U(x,y) = 10xy Currently, the prices of goods x and y are $3 and $5, respectively, and the consumer's income is $150 . a. Find the MRS for this consumer for any given bundle (x,y) . b. Find the optimal consumption bundle for this consumer. c. Suppose the price of good x doubles. How much income is required so that the Econ 201 Beomsoo Kim Spring 2018 consumer is able to purchase...
Doreen has a utility function U(x, y) = 10x + 5y.
Doreen has a utility function U(x, y) = 10x + 5y. The price of good x is $1, and the price of good y is $2. If Doreen's income is $100, how many units of good x would she consume if she chose the bundle that maximizes her utility subject to her budget constraint?
Doreen has a utility function U(x, y) = 10x + 5y. The price of good x...
Doreen has a utility function U(x, y) = 10x + 5y. The price of good x is $1, and the price of good y is $2. If Doreen's income is $100, how many units of good y would she consume if she chose the bundle that maximizes her utility subject to her budget constraint?
Problem . Apu receives utility from consuming X and Y. The price of good X is...
Problem . Apu receives utility from consuming X and Y. The price of good X is S2 and the price of good Y is S6. Apu's income is S12 (a) Graph Apu's budget constraint (b) If Apu's utility function is U(X, Y)-X+4Y, how much X and Ywill he buy? (e) How will your answer change if U(X, )-X + 3Y?
4. Suppose a consumer's utility from consuming bananas is described by the function: U(B) = 10B...
4. Suppose a consumer's utility from consuming bananas is described by the function: U(B) = 10B + 3B2 B3 Answer the following questions about this consumer's banana consumption: (a) Write down a mathematical relationship to describe the value to this consumer from eating an additional banana? (b) Make a table showing total and marginal utility for banana consumption from 0 to 9 bananas. (C) Would this individual ever choose to consume more than 7 bananas? Explain. 5. For each of...
3. A consumer's preferences over a and y are given by the utility function u(x,y) -...
3. A consumer's preferences over a and y are given by the utility function u(x,y) - 2vr 2/y. The individual's income is I $100. The price of a unit of good c is $2, while the price of a unit of good y is S1. a) Graphically describe: i. the consumer's preferences for r and y ii. the budget constraint (b) Find the optimal x that the consumer would choose. You may assume (c) What is the consumer's MRS at...
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...
Is the answer to part (a) 2/3 or 1/2? 1. Alice enjoys consuming goods z and...
Is the answer to part (a) 2/3 or 1/2?
1. Alice enjoys consuming goods z and y. Where (x, y) is the consumption bundle and 0 < a < 1, Alice's utility is: u(z, y) -zy- (a) Originally, Alice has income m 16, and faces prices p Py1, and consumes a bundle at which her utility (subject to her budget) is maximised. Then, py rises to 4. Alice is sadder with the new bundle she chooses, and tells you that...
1. The following total utility schedule (Table 3) of Maria who is consuming goods X and...
1. The following total utility schedule (Table 3) of Maria who is consuming goods X and Y when the price of X is $6 and the price of Y is $30. Maria's income is $144. 2 46 3 62 4 | 74 5 80 6 84 Table 3 Ox 1 TUX 28 MUX 28 Qy 1 TUY 150 MUX 150 2 270 3 360 4 420 7 480 450 470 b. Are these preferences consistent with the law of diminishing...
Doreen has a utility function U(x, y) = 10x + 5y. The price of good x is $1, and the price of good y is $2. If Doreen's income is $100, how many units of good y would she consume if she chose the bundle that maximizes her utility subject to her budget constraint?
Problem . Apu receives utility from consuming X and Y. The price of good X is S2 and the price of good Y is S6. Apu's income is S12 (a) Graph Apu's budget constraint (b) If Apu's utility function is U(X, Y)-X+4Y, how much X and Ywill he buy? (e) How will your answer change if U(X, )-X + 3Y?
4. Suppose a consumer's utility from consuming bananas is described by the function: U(B) = 10B + 3B2 B3 Answer the following questions about this consumer's banana consumption: (a) Write down a mathematical relationship to describe the value to this consumer from eating an additional banana? (b) Make a table showing total and marginal utility for banana consumption from 0 to 9 bananas. (C) Would this individual ever choose to consume more than 7 bananas? Explain. 5. For each of...
3. A consumer's preferences over a and y are given by the utility function u(x,y) - 2vr 2/y. The individual's income is I $100. The price of a unit of good c is $2, while the price of a unit of good y is S1. a) Graphically describe: i. the consumer's preferences for r and y ii. the budget constraint (b) Find the optimal x that the consumer would choose. You may assume (c) What is the consumer's MRS at...
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...
Is the answer to part (a) 2/3 or 1/2?
1. Alice enjoys consuming goods z and y. Where (x, y) is the consumption bundle and 0 < a < 1, Alice's utility is: u(z, y) -zy- (a) Originally, Alice has income m 16, and faces prices p Py1, and consumes a bundle at which her utility (subject to her budget) is maximised. Then, py rises to 4. Alice is sadder with the new bundle she chooses, and tells you that...
1. The following total utility schedule (Table 3) of Maria who is consuming goods X and Y when the price of X is $6 and the price of Y is $30. Maria's income is $144. 2 46 3 62 4 | 74 5 80 6 84 Table 3 Ox 1 TUX 28 MUX 28 Qy 1 TUY 150 MUX 150 2 270 3 360 4 420 7 480 450 470 b. Are these preferences consistent with the law of diminishing...
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