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Please help with these questions
Question 1 0.8 pts Marginal utility O occurs when a consumer buys more of a good as a result of a relative price change O occurs when total utility declines as consumption increases. O occurs when there is a change in purchasing power as a result of a change in the price of a good. O is the additional satisfaction derived from consuming one more unit of a good or service. is the combination of...
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Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to get the biggest bang for the buck. Utility maximizing rule b as the price of a good drops, consumers have more money to spend on it and other goods Consumer equilibrium The amount of satisfaction gained from consumption of goods and services. d shows the combinations of two items that can be purchased with a limited amount of money. Law of diminishing marginal utility...
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17.
The rate at which a consumer is willing to purchase one good
instead of another is called
the budget constraint.
the maximization rate.
the marginal rate of substitution.
opportunity cost.
the total rate of substitution.
20.
A friend of Dylan’s is operating a concession stand for a youth
sporting league and wants Dylan’s advice on pricing. He plans to
sell popcorn for $4, but is unsure of the price to charge for
peanuts. Popcorn provides Dylan with 36 utils,...
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Problem 2
A consumer has the following preferences regarding consumption
and leisure time: ?(?, ?) = ? ∙ (24 − ?) Where ? is the quantity of
an aggregated consumption good and ? are the supplied labour hours
(working in a job) per day, and consequently, 24 − ? is the leisure
time ?. The budget available for daily consumption is the sum of
labour income and other fixed (daily) income with ? = price of the
aggregated consumption good...
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3. Suppose your utility function (e. level of satisfaction from consuming a and b) is given by U(a, b)=a 1/32/3 where a represents apple and b represents banana. Your total income is $500. The price of apple is $5 and the price of banana is $10. (a) Write your Budget Constraint (BC). What is the Marginal Rate of Transformation? (b) Find the Marginal Rate of Substitution. (c) Find the consumption combination of bananas and apples that maximizes your utility given...
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Consider the two-period model from Chapter 9, and assume there is one representative consumer with utility function uc,d) = Iníc) + In(d), so the time discount factor is 3 = 1. There is also a government that levies lump-sum taxes in the current and future periods. The government has expenditures of G = 580 in the current period and G' = 630 in the future period. (a) Suppose the consumer has current and future income (w.y') = (3500, 6510), and...
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1. Consider the following two period consumption savings problem. A consumer cares about consumption (c and future consumption c according to Assume that U(c) is given by for some constant y. In the present the consumer chooses how much to consume and how much to save out of her income y>0 This decision is made in the knowledge that in the future she will be retired, have no income, and thus future consumption will be entirely out of savings: c)a,...
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Q1. A consumer chooses an optimal consumption point where the A) marginal rate of substitution equals the relative price ratio. B) slope of the indifference curve exceeds the slope of the budget constraint C) ratios of all the marginal utilities are equal D) All of the above are correct. Q2. A budget constraint illustrates the A) prices that a consumer chooses to pay for products he consumes. B) consumption bundles that give a consumer equal satisfaction. C) purchases made by consumers. D) consumption bundles that a consumer can afford
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A consumer has the utility function U(X, Y) = (X + 2)(Y +
4). Her income is $100, the price of X is $4, and the
price of Y is $5.
In order to maximize utility subject to her budget constraint,
how many units of X and Y will our consumer choose to purchase?
Sketch a budget line – indifference curve diagram illustrating this
optimum. Label this optimum A.
Suppose the price of X increases to $8, while income and the
price...
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9. Income and substitution effects Carlos and Deborah Azinian live in Detroit and enjoy going out to fancy restaurants for dinner and to diners for breakfast. On the following diagram, the purple curves 11 and 12 represent two of their indifference curves for fancy dinners and diner breakfasts. They have $1,000 per month available to spend on eating out. The price of a diner breakfast is always $10. Each labeled point represents the tangency between a budget constraint and the...
Please help with these questions
Question 1 0.8 pts Marginal utility O occurs when a consumer buys more of a good as a result of a relative price change O occurs when total utility declines as consumption increases. O occurs when there is a change in purchasing power as a result of a change in the price of a good. O is the additional satisfaction derived from consuming one more unit of a good or service. is the combination of...
Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to get the biggest bang for the buck. Utility maximizing rule b as the price of a good drops, consumers have more money to spend on it and other goods Consumer equilibrium The amount of satisfaction gained from consumption of goods and services. d shows the combinations of two items that can be purchased with a limited amount of money. Law of diminishing marginal utility...
3. Suppose your utility function (e. level of satisfaction from consuming a and b) is given by U(a, b)=a 1/32/3 where a represents apple and b represents banana. Your total income is $500. The price of apple is $5 and the price of banana is $10. (a) Write your Budget Constraint (BC). What is the Marginal Rate of Transformation? (b) Find the Marginal Rate of Substitution. (c) Find the consumption combination of bananas and apples that maximizes your utility given...
Consider the two-period model from Chapter 9, and assume there is one representative consumer with utility function uc,d) = Iníc) + In(d), so the time discount factor is 3 = 1. There is also a government that levies lump-sum taxes in the current and future periods. The government has expenditures of G = 580 in the current period and G' = 630 in the future period. (a) Suppose the consumer has current and future income (w.y') = (3500, 6510), and...
1. Consider the following two period consumption savings problem. A consumer cares about consumption (c and future consumption c according to Assume that U(c) is given by for some constant y. In the present the consumer chooses how much to consume and how much to save out of her income y>0 This decision is made in the knowledge that in the future she will be retired, have no income, and thus future consumption will be entirely out of savings: c)a,...
9. Income and substitution effects Carlos and Deborah Azinian live in Detroit and enjoy going out to fancy restaurants for dinner and to diners for breakfast. On the following diagram, the purple curves 11 and 12 represent two of their indifference curves for fancy dinners and diner breakfasts. They have $1,000 per month available to spend on eating out. The price of a diner breakfast is always $10. Each labeled point represents the tangency between a budget constraint and the...