1. If a consumer has a utility function u(X1,X2) XIX: what fraction of her income will...
If a consumer has a utility function u(x1, x2) = x1x24 , what fraction of her income will be spent on good 2?
A consumer has utility function: u(x1 , x2 ) = x1 + 2x2 . The consumer has income m > 0 tospendongood1andgood2. Ifthepriceofx1 isp1 =1andthepriceofx2 isp2 =0.5, then, in order to maximize her utility, the consumer must consume: a) x1 = x2 (b) x1 = 2x2 (c) 2x1 = x2 (d) x1 = 4x2 (e) None of the above
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) Find the demand functions for x1 and x2 assuming -> 1. What is special about Р2 these demand functions? Are both goods normal? Are these tastes homothetic? <1. You probably P2 2) Now find the demand functions for x1 and x2 assuming assumed the opposite above, so now will you find something different. Explain....
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...
The consumer has the utility function U(x1 , x2) = (x1-2)4 (x2-3)3, subject to her budget constraint 10 = 4x1 + 3x2. Write the utility maximization of this consumer using the Lagrangian method and find the optimal value of x1 and x2.
1 pts Question 2 A consumer has preferences represented by the utility function: u(x1, x2)= x x Market prices are pi = 3 and P2 = 4. The consumer has an income m 30. Find an expression for the consumer's Engel curve for good 1. x1(m). ооо D Question 3 1 pts
1. Consider the utility function: u(x1,x2) = x1 +x2. Find the corresponding Hicksian demand function 2. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects to be found below. (b)...
1 Suppose that a consumer has a utility function u(x1, x2) = x2xı. He originally faces prices (1, 2) and has income 100. Then the price of good 1 increases to 2. What are the compensating and equivalent variations? O A 100V4 - 100; 100 - 502 B 100/4 - 100; 100 - 5072 100V4 - 100; 100 - 502 OD 100V4 - 100; 100 – 50/2
Question 1 (20 points). The utility function of the consumer is u(x1, x2) = x1 + x2. a) Let pı = 2 ,P2 = 20 and m = 24. Calculate the optimal quantity demanded of good 1 and 2. (7 points) b) Let p1 = 1,P2 = 4 and m = 100. Calculate the optimal quantity demanded of good 1 and 2. (6 points) c) Let P1 = 1, p2 = 4 and m = 4. Compared to point b),...
2. A consumer has a utility function u(xj, X2) = max Inx, Inx2. What is the consumer's demand function for good 1? What is her indirect utility function? What is her expenditure function?