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For each of these utility functions, find the optimal consumption choices z" and y" for a...
If x > y and y < z, then Group of answer choices x > z x < z x ~ z z < x it is not possible to say if anything about the consumer’s preference for x relative to z If x > y and y > z then Group of answer choices 1.x > z 2.x < z 3.x ~ z 4.z < x or z > x 5.it is not possible to say if anything about...
2. Consider the Cobb-Douglas utility function u(x,y) = x2y2. Let the budget 1, where pr, py are the prices and I denotes the constraint be prx + pyy income. (a) Write the Lagrangian for this utility maximization problem. (b) Solve the first-order conditions to find the demand functions for both good a and good y. [Hint: Your results should only depend on the pa- rameters pa, Py, I.] (c) In the optimal consumption bundle, how much money is spend on...
4) A consumer’s utility function is u(x, y) = min{x, 3y} (a) Find the consumer’s optimal choice for x, y as functions of income I and prices px,py. (b) Sketch the demand curve for y as a function of other price px when py = 10, I = 100. Suggestion: a picture showing the budget set, optimal choice and indifference curve. (I need help with the sketching which is the second part)
1) Eor each of the utility functions below, find the optimal consumption bundle if pi-3 and p2-2 and m-240 a. u(x)-2x2 b. u(x)-xix22 c. d, e. u(x)- 2x1+X2 u(x)-min(x1,2%) u(x)-x1-X22 y(x)-max(x1,x2) X(X1,X2 2) Suppose p1-2, p2-7 for the first 2 units and p2 4 for the rest. a) Ifm-54 and u(x) -X1+3x2, then what is the optimal consumption bundle? b) Ifm-22 and u(x) - min(3xı, 2x2), , thenwhat is the optimal consumption bundle? Erom Workouts: 5.3,5.6,5.7 3)
3. Suppose an individual has perfect-complements preferences that can be represented by the utility function U(x,y)= min[3x,2y]. Furthermore, suppose that she faces a standard linear budget constraint, with income denoted by m and prices denoted by px and p,, respectively. a) Derive the demand functions for x and y. b) How does demand for the two goods depend on the prices, p, and p, ? Explain.
3) A consumer's utility function is 2y (a) Find the consumer's optimal choice for x, y as functions of income I and prices px,py. (Be careful!) (b) Sketch the demand curves for x, y as functions of income I when prices are px = 16, p,-2. (Be careful!)
Consider the following utility function of 3 goods, x, y and z: U(x,y,z)=ax+by+cz; x,y,z≥0 and a, b, c are constants. The prices of good x and y is denoted by pX and pY respectively. The income is denoted by m. Good z is provided by the government free of cost but the quantity of good z provided by the government depends on the consumption of good x and y chosen by the consumer. For example, if in equilibrium, the consumer...
3) A consumer's utility function is u(x,y)22 (a) Find the consumer's optimal choice for x, y as functions of income I and (b) Sketch the demand curves for x, y as functions of income I when prices prices pa,Py. (Be careful!) are p 16,Py 2. (Be careful!)
Textbook: Nicholson & Snyder, Microeconomic Theory, 12th edition. 1) A consumer's utility function is a(z, y) = (a) Find the consumer's optimal choice for x, y as functions of income prices Pa Py and income I. (b) Sketch the demand curve for r as a function of functions of its own price Pr when Py 16, I-256. (c) Sketch the demand curve for x as a function of the other price py when p,-1, 1 = 81.
2. Consider a utility function that represents preferences: u(x,y)= min{80x,40y} Find the optimal values of x and y as a function of the prices px and py with an income level m. (5)