A consumer's utility is given by U (,y) = ry. Income is m and prices are given by pa and Py. (aFind the demand function...
3. (10 points) Income and substitution effects A consumer's utility is given by U(x, y) = xy. Income is m and prices are given by p and Py (a) Find the demand functions for x and y. (b) What is demand for each good if p 2 and py 1 and income is m = (c) If price of x fell to pa 1, what is the consumer's new bundle? (d) How much of the response in the consumption of...
1) A consumer's utility function is 3r3 3y Prices are Pa-2,Py - 32 (a) Find the consumer's optimal choice for x, y as functions of income I (b) Sketch the demand curves for x, y as functions of income I.
) A consumer's utility function is given by: U(x,y) = 10xy Currently, the prices of goods x and y are $3 and $5, respectively, and the consumer's income is $150 . a. Find the MRS for this consumer for any given bundle (x,y) . b. Find the optimal consumption bundle for this consumer. c. Suppose the price of good x doubles. How much income is required so that the Econ 201 Beomsoo Kim Spring 2018 consumer is able to purchase...
3) A consumer's utility function is u(x,y)22 (a) Find the consumer's optimal choice for x, y as functions of income I and (b) Sketch the demand curves for x, y as functions of income I when prices prices pa,Py. (Be careful!) are p 16,Py 2. (Be careful!)
3) A consumer's utility function is 2y (a) Find the consumer's optimal choice for x, y as functions of income I and prices px,py. (Be careful!) (b) Sketch the demand curves for x, y as functions of income I when prices are px = 16, p,-2. (Be careful!)
4. Andy's utility is represented by the function U(X,Y) - XY. His marginal utility of X is MUx = Y. His marginal utility of Y is MUY = . He has income $12. When the prices are Px - 1 and Py -1, Andy's optimal consumption bundle is X* -6 and Y' = 6. When the prices are Px = 1 and P, = 4, Andy's optimal consumption bundle is X** = 6 and Y* 1.5. Suppose the price of...
1) A consumer's utility function is Prices are p -2, Py - 32. (a) Find the consumer's optimal choice for x, y as functions of income I. (b) Sketch the demand curves for x, y as functions of income I.
The utility function is given by U(x, y) = xy2 . (a) Write out the demand functions for goods x and y in terms of I, px, and py. (b) What is the maximum utility the consumer can achieve as a function of I, px, and py? (c) What is the minimum the consumer needs to spend to achieve a level of utility U as a function of px, and py? (d) The initial income is $576, initial prices are...
Suppose a consumer’s utility function is given by U(X,Y) = X*Y. Also, the consumer has $180 to spend, and the price of X, PX = 4.50, and the price of Y, PY = 2 a. How much X and Y should the consumer purchase in order to maximize her utility? b. How much total utility does the consumer receive? c. Now suppose PX decreases to 2. What is the new bundle of X and Y that the consumer will demand?...
A consumer's preferences are given by the following utility function: u(x,y) = xy Assume Pold = 1, Py = 1, and I = 8. a. Solve for the Marshallian demand functions of x and y (your answer should have numbers, not variables. You should round your answers to three decimal places): * old 4 y = 4 b. What is the utility associated with these demands, prices, and income? u = 16 c. Suppose the price of x rises to...