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8. An individual's preferences are represented by the utility function Ulx, y) . Which of the...
7. An individual's preferences are represented by the utility function Ua, y) 4xy x. Which of...
7. An individual's preferences are represented by the utility function Ua, y) 4xy x. Which of the following statements is false? a. The marginal utility of x increases as x increases, holding y constant. b. Preferences are monotonic in both goods. c. The indifference curves slope downward at a decreasing rate. d. The marginal rate of substitution ofx for y increases as y increases, holding x constarnt e. The consumer is willing to give up decreasing amounts of good y...
Assume that an individual’s preferences is represented by the following utility function: ?(?, ?) = (?^1/3)*(y^2/3)...
Assume that an individual’s preferences is represented by the following utility function: ?(?, ?) = (?^1/3)*(y^2/3) a. What could you tell about the type of x and y? (“good” , “bad” or a “neuter”) b. Derive the equation for his/her indifference curve for utility level of 100? c. Derive marginal utility of x and marginal utility of y as a function of x,y. d. Does goods x and y exhibit diminishing marginal utility, constant marginal utility, or increasing marginal utility?...
A consumer has preferences represented by the utility function u(x, y) -xlyi. (This means that a....
A consumer has preferences represented by the utility function u(x, y) -xlyi. (This means that a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The price of good y and the consumer's income are unchanged....
3. Originally, the price of X is $150 and the price of Y is S50. If the price of X increases by $20 and the price o...
3. Originally, the price of X is $150 and the price of Y is S50. If the price of X increases by $20 and the price of Y increases by S10, the new budget line will a. move outward and be parallel to the old budget line b. move outward and become steeper c. move inward and become steeper d. move outward and become flatter e. move inward and become flatter x"2 + 1n0) 4. An individual's preferences are represented...
Question 2 (15 pts) A consumer has preferences represented by the utility function ufa,y)ty. (This means...
Question 2 (15 pts) A consumer has preferences represented by the utility function ufa,y)ty. (This means that Muy and Muy ly 1) a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The price of good...
Question 2 Question 2 (15 pts) A consumer has preferences represented by the utility function u(x,y)...
Question 2
Question 2 (15 pts) A consumer has preferences represented by the utility function u(x,y) -xlyi. (This means that a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income wWhat is the optimal quantity is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The...
1. True or False, and explain briefly. 1) The assumption that more is better implies that...
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
1. (25) Consider the following utility function which specifies Eli’s preferences over two goods, Xy- lophones...
1. (25) Consider the following utility function which specifies Eli’s preferences over two goods, Xy- lophones (X) and Yo-Yos (Y ). (Please note that we call this type of utility function quasi-linear.) √ U(X,Y)=10 X+20Y (a) (5) What is the marginal utility of X? Label your answer MUX and draw a box around your answer. What is the marginal utility of Y? Label your answer MUY and draw a box around your answer. What is the marginal rate of substitution...
ECN 312 help! A-D 1. (25) Consider the following utility function which specifies Eli's preferences over...
ECN 312 help! A-D
1. (25) Consider the following utility function which specifies Eli's preferences over two goods, Xy- lophones (X) and Yo-Yos (Y). (Please note that we call this type of utility function quasi-linear.) U(X, Y) = 10VX + 20% (a) (5) What is the marginal utility of X? Label your answer MUx and draw a box around your answer. What is the marginal utility of Y? Label your answer MUy and draw a box around your answer. What...
Question 1 For the following utility functions (3 pts each for a, b, and c): •...
Question 1 For the following utility functions (3 pts each for a, b, and c): • Find the marginal utility of each good at the point (5, 5) and at the point (5, 15) • Determine whether the marginal utility decreases as consumption of each good increases (i.e., does the utility function exhibit diminishing marginal utility in each good?) • Find the marginal rate of substitution at the point (5, 5) and at the point (5, 15) • Discuss how...
7. An individual's preferences are represented by the utility function Ua, y) 4xy x. Which of the following statements is false? a. The marginal utility of x increases as x increases, holding y constant. b. Preferences are monotonic in both goods. c. The indifference curves slope downward at a decreasing rate. d. The marginal rate of substitution ofx for y increases as y increases, holding x constarnt e. The consumer is willing to give up decreasing amounts of good y...
A consumer has preferences represented by the utility function u(x, y) -xlyi. (This means that a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The price of good y and the consumer's income are unchanged....
3. Originally, the price of X is $150 and the price of Y is S50. If the price of X increases by $20 and the price of Y increases by S10, the new budget line will a. move outward and be parallel to the old budget line b. move outward and become steeper c. move inward and become steeper d. move outward and become flatter e. move inward and become flatter x"2 + 1n0) 4. An individual's preferences are represented...
Question 2 (15 pts) A consumer has preferences represented by the utility function ufa,y)ty. (This means that Muy and Muy ly 1) a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The price of good...
Question 2
Question 2 (15 pts) A consumer has preferences represented by the utility function u(x,y) -xlyi. (This means that a. What is the marginal rate of substitution? b. Suppose that the price of good x is 2, and the price of good y is 1. The consumer's income wWhat is the optimal quantity is 20. What is the optimal quantity of x and y the consumer will choose? c. Suppose the price of good x decreases to 1. The...
1. True or False, and explain briefly. 1) The assumption that more is better implies that the indifference curves are upward sloping 2) Convexity of indifference curves implies that consumers are willing to give up more to get an extra the more they have 3) Consider the following three bundles. Bundle Good Goody If Bundles A and B are on the same indifference curve, preferences satisfy all the usual assumptions introduced in the lecture, Bundle Cis preferred to Bundle A...
ECN 312 help! A-D
1. (25) Consider the following utility function which specifies Eli's preferences over two goods, Xy- lophones (X) and Yo-Yos (Y). (Please note that we call this type of utility function quasi-linear.) U(X, Y) = 10VX + 20% (a) (5) What is the marginal utility of X? Label your answer MUx and draw a box around your answer. What is the marginal utility of Y? Label your answer MUy and draw a box around your answer. What...
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