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John consumes two goods, X and Y and has an income of $25. Price of good X is S3 per unit and price of good Y is $2 per...
) John consumes two goods, X and Y. The marginal utility of X and the marginal utility of Y satis...
) John consumes two goods, X and Y. The marginal utility of X and the marginal utility of Y satisfy the following equations: MUX = Y MUY = X. The price of X is $9, and the price of Y is $12. a. Write an expression for Johnʹs MRS. b. What is the optimal mix between X and Y in Johnʹs market basket? c. John is currently consuming 15 X and 10 Y per time period. Is he consuming an...
Marta consumes only goods X and Y and faces the following utility function: U=7 X+4 Y....
Marta consumes only goods X and Y and faces the following utility function: U=7 X+4 Y. The marginal utility for X is MUX=7 and the marginal utility for Y is MUY=4 . The price of X is $10 and the price of Y is $50. Marta has an initial budget of $200. How many of X and Y will Marta buy given her utility function, her budget, and the prices? X= Y= Suppose that the government places a restriction on X...
Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is U(x,y) =...
Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is U(x,y) = xy and Donna’s utility function is U(x,y) = x2y where x is strawberries and y is chocolate. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2. Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4?
An individual only purchases two goods X and Y . The person has an income of...
An individual only purchases two goods X and Y . The person has an income of $100. The price of X is $2 per unit and the price of Y is $4 per unit. The utility function of this individual is U = 3X +5Y . This means the person has a constant marginal utility of 3 and 5 for goods X and Y , respectively. What bundle of goods X and Y should the person buy to maximize utility....
6. Suppose that the price of good X is $1 and the price of good Y...
6. Suppose that the price of good X is $1 and the price of good Y is $1, and that income is $7. The following tables show the marginal utility schedules for X and Y: Good X: Good Y: Qx MUx Qy MUy 1 15 1 12 2 11 2 9 3 9 3 6 4 6 4 5 5 4 5 3 6 3 6 2 7 1 7 1 How much of good X and how much of good Y should the individual purchase to maximize utility? Explain how you know. (Hint: There are 2 conditions that must be satisfied.)
py = $1 ACE Problem 1 (25 marks) BI LET A consumer buys two goods, good...
py = $1
ACE Problem 1 (25 marks) BI LET A consumer buys two goods, good X and a composite good Y. The utility function is given as ELLE DEMO U(X,Y) = XY + X. 1=$10 Px = $0.5 Where I is income level, Px is the price of good X EL ele 1) Find the optimal basket that maximizes utility and calculate its corresponding utility level.(5 marks) 2) Show your answer for Questions (1) on a graph. ( 5...
Caleb consumes only two goods, X and Y, and faces the following utility function: U=XY. His...
Caleb consumes only two goods, X and Y, and faces the following utility function: U=XY. His initial budget is $800, and the prices of X and Y are $12.5 and $2. What is the marginal utility for X? What is the marginal utility for Y? **Most answers should be round numbers. Answer everything to 1 decimal place, if need be** What are the amounts of X and Y that will maximize Caleb's utility? X = Y = How many X...
Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's...
Suppose there are two consumers, A and B, and two goods, X, and Y. Consumer A's utility function is given by: Ua(X,Y) = X*Y^3 Consumer B's utility function is given by: Ub (X,Y) = X*Y Marginal Utilities for A: MUx =Y^3 , MUy = 3X*Y^2 Marginal Utilities for B: MUx = Y, MUy = X Initial endowments: Person A has 40 units of good X and 20 units of good Y Person B has 30 units of good x and...
A consumer buys two goods, good X and a composite good Y. The utility function is...
A consumer buys two goods, good X and a composite good Y. The utility function is given as U(X,Y) = In3XY. The price of X is Py, the price of Y is Py and Income is I. 1) Derive the demand equation for good X. ( 5 marks) 2) Are the two goods X and Y complements or substitutes? Why? ( 5 marks) 3) Suppose that I=$10 and suppose that initially the Px = $1 and subsequently Px falls and...
1. A consumer is considering to buy only two products, X, and Y. The amount of...
1. A consumer is considering to buy only two products, X, and Y. The amount of total utility yielded by their consumption is shown in the table below. Assume that the prices of X, and Y are $8, and $2 respectively, and that the consumer has an income of $24 to spend. a) Complete the following table by computing the marginal utility and the marginal utility per dollar for successive units of product X and Y. (4 marks) b) How...
py = $1
ACE Problem 1 (25 marks) BI LET A consumer buys two goods, good X and a composite good Y. The utility function is given as ELLE DEMO U(X,Y) = XY + X. 1=$10 Px = $0.5 Where I is income level, Px is the price of good X EL ele 1) Find the optimal basket that maximizes utility and calculate its corresponding utility level.(5 marks) 2) Show your answer for Questions (1) on a graph. ( 5...
A consumer buys two goods, good X and a composite good Y. The utility function is given as U(X,Y) = In3XY. The price of X is Py, the price of Y is Py and Income is I. 1) Derive the demand equation for good X. ( 5 marks) 2) Are the two goods X and Y complements or substitutes? Why? ( 5 marks) 3) Suppose that I=$10 and suppose that initially the Px = $1 and subsequently Px falls and...
1. A consumer is considering to buy only two products, X, and Y. The amount of total utility yielded by their consumption is shown in the table below. Assume that the prices of X, and Y are $8, and $2 respectively, and that the consumer has an income of $24 to spend. a) Complete the following table by computing the marginal utility and the marginal utility per dollar for successive units of product X and Y. (4 marks) b) How...
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