Adrian's utilities of two consumption bundles are 50 and 100, respectively. This implies that A. Adrian...
Adrian's utilities of two consumption bundles are 50 and 100, respectively. This implies that A. Adrian likes the second bundle twice as much. B. Adrian prefers the first bundle. C. Adrian prefers the second bundle. D. Adrian likes the first bundle twice as much.
Homework Answers
Adrian's utilities of two consumption bundles are 50 and 100, respectively. It implies that:-
- Adrian prefers the second bundle
option(C)
Since it gives more utility than the first bundle
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Adrian's utilities of two consumption bundles are 50 and 100,
respectively. This implies that A. Adrian...
2. Susan can choose between two different inheritance bundles: Bundle A con- sists of $100 tomorrow...
2. Susan can choose between two different inheritance bundles: Bundle A con- sists of $100 tomorrow and $10 today. Bundle B consists of $30 tomorrow and $60 today. Susan can borrow and lend money at an interest rate of 15%. Consumption goods cost $1 per unit today and there is no inflation. (a) What is the present value of each of the two bundles? What is the future value? (b) Which bundle do you think Susan should choose? Why? (c)...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r, y)- .5,2 where denotes the quantity of good X and y denotes the quantity of good Y. The current market price for X is px 10 while the market price for Y is Pr = $5. Sally's current income is $500. (a) Write the expression for Sally's budget constraint. (1 point) (b) Find the optimal consumption bundle that Sally will...
Rosie makes fudge using two ingredients, sugar and chocolate. She prefers to have more of both...
Rosie makes fudge using two ingredients, sugar and chocolate. She prefers to have more of both goods, but she also prefers similar quantities of each; otherwise the fudge is too sweet or too bitter. In fact, her preferences are given by the utility function U(S,C) = S 1/2 + C 1/2 . A. What is Rosie’s preference between the bundle (4,16) and (16,4)? (Note that the consumption bundle is (# units of sugar, # units of chocolate)). What is Rosie’s...
Problem 2 Suppose that Prof. Wu faces three consumption bundles A-1 apples,3 bananas), . B (3...
Problem 2 Suppose that Prof. Wu faces three consumption bundles A-1 apples,3 bananas), . B (3 apple, 2 bananas), . C (4 apples, 2 bananas) Assume that Prof. Wu prefers C to B and he is indifferent between Λ and B 1) If Prof. Wu is rational, what additional conditions you need to impose on Prof. Wu's pref erences? Explain why after adding those conditions, we can say Prof. Wu is rational 2) Depict the three consumption bundles on a...
3. Craig likes both apples and bananas. He consumes nothing else. The consumption bundle where Craig...
3. Craig likes both apples and bananas. He consumes nothing else. The consumption bundle where Craig consumes x, bushels of apples per year and Xg bushels of bananas per year is written as (X4, Xg). Last year, Craig consumed 20 bushels of apples and 5 bushels of bananas. It happens that the set of consumption bundles (XA, Xg) such that Craig is indifferent between (XA, Xg) and 0,5) is the set of all bundles such that Xg = 100/XA. The...
An individual plots her utility from a consumption bundle based on the three utility structures as...
An individual plots her utility from a consumption bundle based on the three utility structures as follows Linear: U(x y) 5x+3y Cobb-Douglas: U(x,y)-хгуч CES: (3x2 + (-2)y2)i2 The unit price of x and y are 5 and 2 respectively. 212-1 a. Compute the utility for different structures for the following bundles - (5,5), (1,8) and (25,5) b. Compute the marginal rate of substitution for the three utility structures c. Given a budget of 100 units, determine the optimal allocation for...
Question Completion Status: QUESTION 19 Aji Fatou and Mustapha both obey the two-period model of consumption....
Question Completion Status: QUESTION 19 Aji Fatou and Mustapha both obey the two-period model of consumption. Aji Fatou earns $100 in the first period and $100 in the second period. Mustapha cams nothing in the first period and $210 in the second period. Both of them can borrow or lend at the interest rater. You observe both Aji Fatou & Mustapha consuming $100 in the first period and $100 in the second period. What is the interest rater? a 10%...
9. As Matt’s consumption of Santa Cruz (sparkling water) goes up, his ____. A) average utility...
9. As Matt’s consumption of Santa Cruz (sparkling water) goes up, his ____. A) average utility from consuming Santa Cruz increases. B) total utility from consuming Santa Cruz increases. C) marginal utility from consuming Santa Cruz increases. D) elasticity of utility from consuming Santa Cruz increases. 10. Diminishing marginal utility means that ____. A) Taylor will enjoy his second taco less than the first. B) the total utility from one taco exceeds the total utility from two hamburgers. C) the...
4. The price and average per capita consumption per year of a food-bundle and transportation of...
4. The price and average per capita consumption per year of a food-bundle and transportation of the same quality in Russia and US are Food-bundle P Q Transportation RESP Russia 40,000 rubles 1 300,000 rubles 1/15 The US $10,000 $10,000 a) Compute Russia and US per capita consumption in rubles and dollars, respectively. b) Assuming $1-30 rubles exchange rate, convert Russia's per capita consumption from rubles to dollars. c) Using PPP, i.e., the same prices in the two countries, and...
(Please ignore the dashed line) Problem 10. Let an individual's utility function be given as ux,,...
(Please ignore the dashed line)
Problem 10. Let an individual's utility function be given as ux,, )-2v,vx, (a) Compute the Marginal Rate of Substitution. b) Initially, the individual consumes bundle 100, 125) Then, the individual's consumption of the first good is cut to x,-50. What is the new, level of consumption of good 2, r, that the individual needs to consume in order to reach the same utility level as before? c) Given the prices p, 1 and p2 for...
2. Susan can choose between two different inheritance bundles: Bundle A con- sists of $100 tomorrow and $10 today. Bundle B consists of $30 tomorrow and $60 today. Susan can borrow and lend money at an interest rate of 15%. Consumption goods cost $1 per unit today and there is no inflation. (a) What is the present value of each of the two bundles? What is the future value? (b) Which bundle do you think Susan should choose? Why? (c)...
Sally consumes two goods, X and Y. Her preferences over consumption bundles are repre- sented by the utility function r, y)- .5,2 where denotes the quantity of good X and y denotes the quantity of good Y. The current market price for X is px 10 while the market price for Y is Pr = $5. Sally's current income is $500. (a) Write the expression for Sally's budget constraint. (1 point) (b) Find the optimal consumption bundle that Sally will...
Problem 2 Suppose that Prof. Wu faces three consumption bundles A-1 apples,3 bananas), . B (3 apple, 2 bananas), . C (4 apples, 2 bananas) Assume that Prof. Wu prefers C to B and he is indifferent between Λ and B 1) If Prof. Wu is rational, what additional conditions you need to impose on Prof. Wu's pref erences? Explain why after adding those conditions, we can say Prof. Wu is rational 2) Depict the three consumption bundles on a...
3. Craig likes both apples and bananas. He consumes nothing else. The consumption bundle where Craig consumes x, bushels of apples per year and Xg bushels of bananas per year is written as (X4, Xg). Last year, Craig consumed 20 bushels of apples and 5 bushels of bananas. It happens that the set of consumption bundles (XA, Xg) such that Craig is indifferent between (XA, Xg) and 0,5) is the set of all bundles such that Xg = 100/XA. The...
An individual plots her utility from a consumption bundle based on the three utility structures as follows Linear: U(x y) 5x+3y Cobb-Douglas: U(x,y)-хгуч CES: (3x2 + (-2)y2)i2 The unit price of x and y are 5 and 2 respectively. 212-1 a. Compute the utility for different structures for the following bundles - (5,5), (1,8) and (25,5) b. Compute the marginal rate of substitution for the three utility structures c. Given a budget of 100 units, determine the optimal allocation for...
Question Completion Status: QUESTION 19 Aji Fatou and Mustapha both obey the two-period model of consumption. Aji Fatou earns $100 in the first period and $100 in the second period. Mustapha cams nothing in the first period and $210 in the second period. Both of them can borrow or lend at the interest rater. You observe both Aji Fatou & Mustapha consuming $100 in the first period and $100 in the second period. What is the interest rater? a 10%...
4. The price and average per capita consumption per year of a food-bundle and transportation of the same quality in Russia and US are Food-bundle P Q Transportation RESP Russia 40,000 rubles 1 300,000 rubles 1/15 The US $10,000 $10,000 a) Compute Russia and US per capita consumption in rubles and dollars, respectively. b) Assuming $1-30 rubles exchange rate, convert Russia's per capita consumption from rubles to dollars. c) Using PPP, i.e., the same prices in the two countries, and...
(Please ignore the dashed line)
Problem 10. Let an individual's utility function be given as ux,, )-2v,vx, (a) Compute the Marginal Rate of Substitution. b) Initially, the individual consumes bundle 100, 125) Then, the individual's consumption of the first good is cut to x,-50. What is the new, level of consumption of good 2, r, that the individual needs to consume in order to reach the same utility level as before? c) Given the prices p, 1 and p2 for...
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