Intermediate microeconomics
Alice likes to have three cookies with each cup of tea. She does not care for tea without cookies or about cookies without tea.
1. Draw Alice's indifference curve passing through the point (6 cookies, 2 cups of tea).
2. Show the substitution and income effect of an increase in the price of cookies.
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2. (30 pts) Carol likes milk (201) and cookies (2). She always takes one cup of...
2. (30 pts) Carol likes milk (201) and cookies (2). She always takes one cup of cookies with two cups of milk. Let Pı be the price of milk (per cup), P2 be the price of cookies (per cup), and m be her weekly income. (a) Draw some of her indifference curves and find her ordinary demand functions for milk and cookies. (b) Derive her price offer curves and her income offer curve. (c) Suppose that Pı = P2 =...
Tom likes cookies (c) and milk (ml). He always takes one cup of cookies with two...
Tom likes cookies (c) and milk (ml). He always takes one cup of cookies with two cups of milk. Both cookies and milk cost $2 per cup. Tom has $24 to spend on these two goods. Consider a price drop in milk to $1 per cup. What kind of preferences does Tom have? Illustrate the shape of his indifference curves (cookies are measured on the y-axis). Derive his demand functions for cookies and milk. Find his optimal consumption bundle before...
3.2) (10 points) Jane likes to have Tea (T) with Cookies (C). She always has 4...
3.2) (10 points) Jane likes to have Tea (T) with Cookies (C). She always has 4 cookies for every cup of tea. 3.2a) (points) Draw 2 indifference curves that describe her preferences with Cookies (C) on the horizontal axis and Tea (T) on the vertical axis. 3.2b) (3 points) What is her utility function that would represent her preferences? • Her utility function: UCT) - 3.2c) (4 points) If the price of a cup of tea, Py = $2 and...
please answer the first four subparts 3.2) (10 points) Jane likes to have Tea (T) with...
please answer the first four subparts
3.2) (10 points) Jane likes to have Tea (T) with Cookies (C). She always has 4 cookies for every cup of tea. 3.2.) 3 points) Draw 2 indifference curves that describe her preferences with Cookies (C) on the horizontal axis and Tea (T) on the vertical axis. 3.2b) (3 points) What is her utility function that would represent her preferences? Her utility function: U(CT) - 3.2c) (4 points) If the price of a cup...
The indifference curves in the figure below illustrate Alice's preferences over weekly leisure I and weekly...
The indifference curves in the figure below illustrate Alice's preferences over weekly leisure I and weekly consumption c. Alice has 100 hours each week to allocate between work and leisure activities. If Alice works, she has no nonlabor income, but she earns $10 per hour. (The price of consumption is $1 per unit.) If she doesn't work, she receives government aid in the form of a $400 weekly cash grant. EFF Consumption 1400 40 80 20 60 100 120 160...
The indifference curves in the figure below illustrate Alice's preferences over weekly leisure I and weekly...
The indifference curves in the figure below illustrate Alice's
preferences over weekly leisure I and weekly consumption c. Alice
has 100 hours each week to allocate between work and leisure
activities. If Alice works, she has no nonlabor income, but she
earns $10 per hour. (The price of consumption is $1 per unit.) If
she doesn't work, she receives government aid in the form of a $400
weekly cash grant.
Which indifference curve do we use to determine Alice's
reservation...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2 g...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2 g of sugar for each cup of coffee. She has S6 to spend on sugar and coffee. One gram of sugar costs 5 cents and one cup of coffee costs 20 cents. Draw a diagram, with sugar on the horizontal axis and cup of coffee on the vertical axis, to answer the following questions. 1. Which bundle will Sandra consume (represented by point A)?...
Happy Goluki likes tea (good 1) and cookies (good 2) Her preferences are represented by the...
Happy Goluki likes tea (good 1) and cookies (good 2) Her preferences are represented by the utility function U(q1,q2) (q1)05(q2)0.5, where q1 is the number of cups of tea and q2 is the number of cookies Goluki is given I-$180 that she is allowed to spend as she wishes on tea and cookies. a) Calculate Goluki's optimal bundle if the price of tea is p1=$1 and the price of cookies s p2 $2. Call this bundle A and show it...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2 g of sugar for each cup of coffee. She has S6 to spend on sugar and coffee. One gram of sugar costs 5 cents and one cup of coffee costs 20 cents. Draw a diagram, with sugar on the horizontal axis and cup of coffee on the vertical axis, to answer the following questions. 1. Which bundle will Sandra consume (represented by point A)?...
5. Draw out examples of each of the following indifference curves: imperfect substitutes, perfect substitutes, and...
5. Draw out examples of each of the following indifference curves: imperfect substitutes, perfect substitutes, and perfect complements. 6. Jody enjoys having exactly 1 teaspoon of sugar with every cup of coffee she has. What does this say about her indifference curves between the two goods? What happens to her utility level when she is given 5 teaspoons of sugar with one coffee? (Just an explanation) 7. Jay’s Utility function is given by U(x,z) = 3x10.2 x20.8 and P1=$2 and...
2. (30 pts) Carol likes milk (201) and cookies (2). She always takes one cup of cookies with two cups of milk. Let Pı be the price of milk (per cup), P2 be the price of cookies (per cup), and m be her weekly income. (a) Draw some of her indifference curves and find her ordinary demand functions for milk and cookies. (b) Derive her price offer curves and her income offer curve. (c) Suppose that Pı = P2 =...
3.2) (10 points) Jane likes to have Tea (T) with Cookies (C). She always has 4 cookies for every cup of tea. 3.2a) (points) Draw 2 indifference curves that describe her preferences with Cookies (C) on the horizontal axis and Tea (T) on the vertical axis. 3.2b) (3 points) What is her utility function that would represent her preferences? • Her utility function: UCT) - 3.2c) (4 points) If the price of a cup of tea, Py = $2 and...
please answer the first four subparts
3.2) (10 points) Jane likes to have Tea (T) with Cookies (C). She always has 4 cookies for every cup of tea. 3.2.) 3 points) Draw 2 indifference curves that describe her preferences with Cookies (C) on the horizontal axis and Tea (T) on the vertical axis. 3.2b) (3 points) What is her utility function that would represent her preferences? Her utility function: U(CT) - 3.2c) (4 points) If the price of a cup...
The indifference curves in the figure below illustrate Alice's preferences over weekly leisure I and weekly consumption c. Alice has 100 hours each week to allocate between work and leisure activities. If Alice works, she has no nonlabor income, but she earns $10 per hour. (The price of consumption is $1 per unit.) If she doesn't work, she receives government aid in the form of a $400 weekly cash grant. EFF Consumption 1400 40 80 20 60 100 120 160...
The indifference curves in the figure below illustrate Alice's
preferences over weekly leisure I and weekly consumption c. Alice
has 100 hours each week to allocate between work and leisure
activities. If Alice works, she has no nonlabor income, but she
earns $10 per hour. (The price of consumption is $1 per unit.) If
she doesn't work, she receives government aid in the form of a $400
weekly cash grant.
Which indifference curve do we use to determine Alice's
reservation...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2 g of sugar for each cup of coffee. She has S6 to spend on sugar and coffee. One gram of sugar costs 5 cents and one cup of coffee costs 20 cents. Draw a diagram, with sugar on the horizontal axis and cup of coffee on the vertical axis, to answer the following questions. 1. Which bundle will Sandra consume (represented by point A)?...
Happy Goluki likes tea (good 1) and cookies (good 2) Her preferences are represented by the utility function U(q1,q2) (q1)05(q2)0.5, where q1 is the number of cups of tea and q2 is the number of cookies Goluki is given I-$180 that she is allowed to spend as she wishes on tea and cookies. a) Calculate Goluki's optimal bundle if the price of tea is p1=$1 and the price of cookies s p2 $2. Call this bundle A and show it...
Exercise 3 For Sandra, coffee and sugar are perfect complements: she wants to consume exactly 2 g of sugar for each cup of coffee. She has S6 to spend on sugar and coffee. One gram of sugar costs 5 cents and one cup of coffee costs 20 cents. Draw a diagram, with sugar on the horizontal axis and cup of coffee on the vertical axis, to answer the following questions. 1. Which bundle will Sandra consume (represented by point A)?...
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