Assume that a consumer purchases three commodities and the demand for the second commodity
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Assume that a consumer purchases three commodities and the demand for the second commodity
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can...
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can be represented by a utility function of the form U (, x2) - 4x +2 20x1 Suppose that this consumer is a price taker who faces a finite constant per-unit price for commodity The consumer is endowed with income of y. Throughout this question you may assume one of pi 0 and a finite constant per-unit price for commodity two of p2 > 0....
66. DEMAND FOR COMMODITIES Assume that the demand func tion for a certain commodity has the...
66. DEMAND FOR COMMODITIES Assume that the demand func tion for a certain commodity has the form ax+ where x is the quantity demanded, measured in units of a thousand and p is the unit price in dollars. Suppose the quantity demanded is 6000 ( 6) when the unit price is $8 and 8000 (x = 8) when the unit price is $6. Determine the demand equation. What is the quantity demanded when the unit price is set at $7.50?
5. (22 pts) Consider the three-commodity market model given by: Qi = 16 – 2p1 +...
5. (22 pts) Consider the three-commodity market model given by: Qi = 16 – 2p1 + 2p2 + P3 and Qi = 2p1 – 7 Q2 = 8+2p1 – P2 – P3 and Q2 = 4p2 – 4 Q% = 4+421 – P2 – 4p3 and Qs = 2p3 – 3 where Q4, Q and pi denote quantity demanded, quantity supplied and price of good i = 1, 2, 3, respectively. (a) What is the relationship among the three goods?...
Problem 1 You have an income of $50 to spend on two commodities. The price of commodity 2 is constant at $1. Assume tha...
Problem 1 You have an income of $50 to spend on two commodities. The price of commodity 2 is constant at $1. Assume that whatever you purchase, you must consume 1. The price of commodity 1 is $2 for the first 15 units, but $1 for each additional unit exceeding 15. Draw the budget set. 2. Suppose now that the price of good 1 is constant at $2. The government taxes $2 per unit on commodity 1 and 5% per...
5. (4 pts) An individual purchases quantities a, b, and, c of three different commodities whose...
5. (4 pts) An individual purchases quantities a, b, and, c of three different commodities whose prices are p, q, and r, respectively. The consumer spends m dollars, where m > 2p, and the utility function is given by U(a, b, c) = a + ln(bc) Show that when utility is maximized, the expenditure on each of the second and the third good is equal to p. Find a, b, and c when utility is maximized. (assume Lagrange multipliers gives...
3. Assume that a typical consumer's utility function is U(qI.4p) qi+q. and this consumer's income is...
3. Assume that a typical consumer's utility function is U(qI.4p) qi+q. and this consumer's income is 1-100. The prices for these two goods are pi and p2, and pi p2- b. Assume that there are m-20 identical consumers and p2-80. The supply of good 1 What are the price elasticity of demand and price elasticity of supply? (4 points) a. Derive the demands for these two goods. (4 points) is Qis=10+P1. Find the equilibrium of the good 1 market? (6...
Two markets for two commodities interact with each other in the sense that the demand for...
Two markets for two commodities interact with each other in the sense that the demand for each product depends not only on its own price, but also on the prices of other products. Suppose that the demand functions are as follows: q d 1 = 18 − 3p1 + p2 q d 2 = 12+p1 − 2p2 Suppliers are assumed willing to produce these two products according to the following supply functions: q s 1 = -2 + 4p1 q...
Suppose a consumer has a utility function U(x1, x2) = Inxi + x2. The consumer takes...
Suppose a consumer has a utility function U(x1, x2) = Inxi + x2. The consumer takes prices (p1 and p2) and income (I) as given. > 1. What is special about P2 1) Find the demand functions for and x2 assuming these demand functions? Are both goods normal? Are these tastes homothetic? 2) Now find the demand functions for x1 and x2 assuming-<1. You probably P2 assumed the opposite above, so now will you find something different. Explain 3) Graph...
Question v) to question viii) Thank you An economy has three agents, A. B and C,...
Question v) to question viii)
Thank you
An economy has three agents, A. B and C, and three goods 1, 2 and 3. The endowments of the three consumers are as follows e (3,0,0); e (i) Write down the total endowment vector of the economy. (0,5,0); (1,1,1) Given a price vector p (p,P2 Pa), the demand functions of the three agents for cach of the three goods are as follows (I am giving these to you rather than ask you...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the consumer's demand for good l as a function of prices and income. (b) Draw an Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and P2 = 1. (c) Draw another Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and p2 = 3. (d) Draw...
Consider a consumer whose preferences over bundles of non-negative amounts of each of two commodities can be represented by a utility function of the form U (, x2) - 4x +2 20x1 Suppose that this consumer is a price taker who faces a finite constant per-unit price for commodity The consumer is endowed with income of y. Throughout this question you may assume one of pi 0 and a finite constant per-unit price for commodity two of p2 > 0....
66. DEMAND FOR COMMODITIES Assume that the demand func tion for a certain commodity has the form ax+ where x is the quantity demanded, measured in units of a thousand and p is the unit price in dollars. Suppose the quantity demanded is 6000 ( 6) when the unit price is $8 and 8000 (x = 8) when the unit price is $6. Determine the demand equation. What is the quantity demanded when the unit price is set at $7.50?
5. (22 pts) Consider the three-commodity market model given by: Qi = 16 – 2p1 + 2p2 + P3 and Qi = 2p1 – 7 Q2 = 8+2p1 – P2 – P3 and Q2 = 4p2 – 4 Q% = 4+421 – P2 – 4p3 and Qs = 2p3 – 3 where Q4, Q and pi denote quantity demanded, quantity supplied and price of good i = 1, 2, 3, respectively. (a) What is the relationship among the three goods?...
Problem 1 You have an income of $50 to spend on two commodities. The price of commodity 2 is constant at $1. Assume that whatever you purchase, you must consume 1. The price of commodity 1 is $2 for the first 15 units, but $1 for each additional unit exceeding 15. Draw the budget set. 2. Suppose now that the price of good 1 is constant at $2. The government taxes $2 per unit on commodity 1 and 5% per...
5. (4 pts) An individual purchases quantities a, b, and, c of three different commodities whose prices are p, q, and r, respectively. The consumer spends m dollars, where m > 2p, and the utility function is given by U(a, b, c) = a + ln(bc) Show that when utility is maximized, the expenditure on each of the second and the third good is equal to p. Find a, b, and c when utility is maximized. (assume Lagrange multipliers gives...
3. Assume that a typical consumer's utility function is U(qI.4p) qi+q. and this consumer's income is 1-100. The prices for these two goods are pi and p2, and pi p2- b. Assume that there are m-20 identical consumers and p2-80. The supply of good 1 What are the price elasticity of demand and price elasticity of supply? (4 points) a. Derive the demands for these two goods. (4 points) is Qis=10+P1. Find the equilibrium of the good 1 market? (6...
Suppose a consumer has a utility function U(x1, x2) = Inxi + x2. The consumer takes prices (p1 and p2) and income (I) as given. > 1. What is special about P2 1) Find the demand functions for and x2 assuming these demand functions? Are both goods normal? Are these tastes homothetic? 2) Now find the demand functions for x1 and x2 assuming-<1. You probably P2 assumed the opposite above, so now will you find something different. Explain 3) Graph...
Question v) to question viii)
Thank you
An economy has three agents, A. B and C, and three goods 1, 2 and 3. The endowments of the three consumers are as follows e (3,0,0); e (i) Write down the total endowment vector of the economy. (0,5,0); (1,1,1) Given a price vector p (p,P2 Pa), the demand functions of the three agents for cach of the three goods are as follows (I am giving these to you rather than ask you...
Problem 2 (30 marks) A consumer has a utility function (11,12)= = = (a) Express the consumer's demand for good l as a function of prices and income. (b) Draw an Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and P2 = 1. (c) Draw another Engel curve for the consumer's demand for good 1 when the prices are given by Pi = 1, and p2 = 3. (d) Draw...
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