2. When Marge created her budget, she allocated $56 of her income to be used towards apple and pumpkin pie. Assume...
urrently, Homer buys 7 donuts and 5 candy bars each week. Buying 7 donuts a week gives Homer a marginal utility per dollar of 8.2. Buying 5 candy bars a week gives him a marginal 1. utility per dollar of 7.1. To maximize his total utility, should Homer increase his consumption of donuts? (1 pt.) When Marge created her budget, she allocated $56 of her income to be used towards apple and pumpkin pie. Assume the price of apple pie...
Suppose that Jessica has income Y and has preferences over hamburgers and movie tickets. Her budget constraint is: Y = Ph*h+Pm*m. Where Ph and Pm denote the price of hamburgers and movie tickets and h and m their quantity. Assume that Jessica's income is equal to $400 and that each hamburger costs $4 and each ticket costs $8. Draw the budget constraint as well as an indifference curve that satisfies the condition for utility maximization. Please fully label the graph....
Please be clear. Thank you! Problem 2 (30 points): Kirpa is trying to decide how many bours to work each week. Her utlity is given by the following function: U(C,H)CH3, where C represents weekly consumption and H represents weekly leisure bours. Her marginal utility with respect to consumption is MUc -2cH, and her marginal utility with respect to leisure is MUH 3C3H Assume Kirpa has some assets a that she uses for weekly consumption, so that her weekly budget constralnt...