Question

1. Utility is given by U(x, y) = xy + 10y, with marginal utilities MU, = y and MU, = x + 10. The price of r is Px and the pri

0 0
Add a comment Improve this question Transcribed image text
Answer #1

P u(x, muy = x+10 u(x, y) = xy +104 mox- y ne optimality MRS-mont Yly = x lx+lope Budget xlx+ Yly-Income 2x k + loke=1 P Px>1

Add a comment
Know the answer?
Add Answer to:
1. Utility is given by U(x, y) = xy + 10y, with marginal utilities MU, =...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • clear writing please 1. Utility is given by U(x,y) = y + 10y, with marginal utilities...

    clear writing please 1. Utility is given by U(x,y) = y + 10y, with marginal utilities MU, = y and MU, = x + 10. The price of x is P, and the price of y is Py. The consumer has income m. (a) Assume first that we have an interior solution. Solve for the demand for u. (b) Suppose now that m = 100. Since I must never be negative, what is the maximum price for good x for...

  • Suppose that a consumer’s utility function is U(x,y)=xy+10y. the marginal utilities for this utility function are...

    Suppose that a consumer’s utility function is U(x,y)=xy+10y. the marginal utilities for this utility function are MUx=y and MUy=x+10. The price of x is Px and the price of y is Py, with both prices positive. The consumer has income I. (this problem shows that an optimal consumption choice need not be interior, and may be at a corner point.) Assume first that we are at an interior optimum. Show that the demand schedule for x can be written as...

  • Anna's utility function is given by U (r.y) = (r + 3) (y + 2), where...

    Anna's utility function is given by U (r.y) = (r + 3) (y + 2), where I and y are the two goods she consumes. The price of good r is p ,. The price of good y is Py. Her income is m. (a) Write her maximization problem and find her demand functions for the two goods. Is it always possible to have an interior solution? Justify your answer. (b) Are the two goods ordinary or giffen? Are the...

  • 4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X...

    4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X is MUx = Y. His marginal utility of Y is MUY = . He has income $12. When the prices are Px - 1 and Py -1, Andy's optimal consumption bundle is X* -6 and Y' = 6. When the prices are Px = 1 and P, = 4, Andy's optimal consumption bundle is X** = 6 and Y* 1.5. Suppose the price of...

  • 1. Suppose a consumer has the utility function over goods x and y u(x, y) =...

    1. Suppose a consumer has the utility function over goods x and y u(x, y) = 3x}}} (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x (Px, py,m) and y* (Px, Py,m). Show all of your work and circle your final...

  • 1) Consider a consumer with utility function u=xy (MU),=y, MU y=xand RS ). 1 = 100,...

    1) Consider a consumer with utility function u=xy (MU),=y, MU y=xand RS ). 1 = 100, Pr=2 and py-4. Find this consumer's optimal bundle r.y Calculation:

  • 1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x{y}...

    1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x{y} (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x* (Px. Py,m) and y* (Px.p.m). Show all of your work and circle your final answers. (7...

  • 1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x3...

    1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x3 yž (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x* (Px, Py,m) and y* (Px, Py,m). Show all of your work and circle your final...

  • (g) A representative consumer has a utility function U (x, y) = xy. A representative firm...

    (g) A representative consumer has a utility function U (x, y) = xy. A representative firm makes good x and has a production function x = f(k, l) = (kl)0.25and an unavoidable fixed cost equal to A. There are 100 consumers and, initially, 100 firms. Prices are w = v = Py = 1 and Px is determined in a competitive market. Representative consumer income is I = 2. Assume M stays at 100 & capital isn’t fixed. (g) Suppose...

  • Suppose a consumer’s utility function is given by U(X,Y) = X*Y. Also, the consumer has $180...

    Suppose a consumer’s utility function is given by U(X,Y) = X*Y. Also, the consumer has $180 to spend, and the price of X, PX = 4.50, and the price of Y, PY = 2 a. How much X and Y should the consumer purchase in order to maximize her utility? b. How much total utility does the consumer receive? c. Now suppose PX decreases to 2. What is the new bundle of X and Y that the consumer will demand?...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT