A) Suppose U = ln(x)+y and Px=2, and Py=4. Write down the expenditure minimizing lagrangian for this problem. (you don’t need to solve it)
B) You have $8 which you can spend on X or Y. The price of Y is always $1 but the price of X is $1 for the first 2 and $2 after that. Draw the budget constraint (make sure to label the graph with all of the relevant information).
C) Suppose U = min[2X, 3Y] and I=12, Px=2 and Py= Find X* and Y*.
D) Suppose that everyone has the same demand function for tennis balls: T*=(30/PT). The current price of a can of tennis balls is $3. How much revenue would the government raise per person if they put a $2 tax on each can of tennis balls?
A) Suppose U = ln(x)+y and Px=2, and Py=4. Write down the expenditure minimizing lagrangian for...
A) Suppose U = min[X, 3Y] and I=12, Px=1 and Py=5. Find X* and Y*. B) Draw an indifference curve and a normal linear budget constraint such that there is a tangency point (where MRS= price ratio) that is not the optimal bundle. C) Suppose U=X∙Y5. Find X* and Y*. D) Suppose U = 5∙X + 2∙Y and I=12, Px=2 and Py=1. Find X* and Y*.
A) Suppose U = min[X, 3Y] and I=12, Px=1 and Py=5. Find X* and Y*. B) Draw an indifference curve and a normal linear budget constraint such that there is a tangency point (where MRS= price ratio) that is not the optimal bundle. C) Suppose U=X∙Y5. Find X* and Y*. D) Suppose U = 5∙X + 2∙Y and I=12, Px=2 and Py=1. Find X* and Y*.
U(X,Y) = ln(X) + ln(Y) I = 50, Px = 5, Py = 10 Find MRSX,Y Find demand functions for X and Y Find the optimal bundle for the following values of the exogenous variables
Suppose your utility function is U (x, y) = 2 ln(2) + 4y c) Given PX - 1. Py = 2, and M =5. Find the elasticity of demand (own-price elasticity) for good x -- is good x ordinary or Giffen? Edit View Insert Format Tools Table 12pt Paragraph B I VART :
Consider the following individual (indirect) expenditure function: E(px, py, U) = 2(px py U)1/2. At price px = 20, py = 40 and U = 200, the quantity demand xc (on this individual compensated demand curve) is [xc]. Hint: Use the Shephard lemma to derive this individual compensated demand function.
U 1 3 x 3 y 4 = Suppose the price of x is given by px and the price of y is given by Py and the budget income of the consumer is given by 1. Price of x, Price of y and Income are always strictly positive. Assume interior solution. a) Write the statement of the problem (1 point) b) Compute the parametric expressions of the equilibrium quantity of x & y purchased and the maximized utility. You...
u(x,y)= x+3y,INCOME=12;px =1,py =2;p′x =1,p′y =4 initial prices px,py and final prices p′x,p′y. For THE problem, you are to find: (a) the optimal choice at the initial prices (b) the optimal choice at the final prices (c) the change = optimal choice at final prices - optimal choice at initial prices (d) the income effect and the substitution effect
Given a utility function U=(x+2)(y+1) and Px = 4, Py = 6, and budget B = 130: a) Write the Lagrangian function; b) Find the optimal levels of purchases x* and y*; c) Is the second-order sufficient condition for maximum satisfied?
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...
Given a utility function U(x,y) = xy. The price of x is Px, while the price of y is Py. The income is I. Suppose at period 0, Px = Py = $1 and income = $8. At period 1, price of x (Px) is changed to $4. Compute the price effect, substitution effect, and income effect for good x from the price change.