1) a) Given the following typical utility curves determine whether they have convex indifference curves (that is, whether the Marginal Rate of Substitution declines as x increases). U(x, y)=/x - y
Q: Suppose that a consumer's indifference curve map does not obey the assumption of a diminishing MRS,…
A: An indifference curve shows all the combination of goods that gives same level of satisfaction or…
Q: We claimed in the text that if preferences were monotonic, then a diagonal line through the origin…
A: Indifference curve refers to the graphical representation of various combinations of two goods,…
Q: suppose that a consumer has a utility function U=AX^2Y^2 Which of the following statements is false?…
A: The given infomation:The utility function can be written as follows:
Q: indifference curve at utility level equal to 20 is?
A: Utility means the satisfaction that a consumer gains from consuming a product or service. Utility…
Q: , Draw indifference curves for the following utility functions. a) u(x, y) = x + 2y b) u(x, y) =…
A: Utility Function is a function which relates the amount of the consumption goods and utility derived…
Q: A well-behaved utility function is assumed to exhibit monotonic and convex preferences. (1) Define…
A: lets solve part 1 and part 2 in the following steps
Q: An indifference curve is the locus of points of combination of goods which gives equal satisfaction…
A: Consumers Equilibrium: Consumer equilibrium is the situation of maximum satisfaction. When the…
Q: If a consumer has chosen optimally, their Marginal Rate of Substitution is equal to the price…
A: Marginal rate of substitution (MRS) is the rate at which an individual will be willing to substitute…
Q: Consider a consumer with preferences represented by a utility function u(r1, 12) = max{r1,72}. The…
A: Indifference curves are the curves that show the different combination of two goods that gives the…
Q: Suppose you have the following Utility function: U = U(x, y) = (x − γ) ^α (y − δ) ^β (a) Write…
A: U(x, y) = (x − γ)α (y − δ)β Total Differential : dU=[∂U/∂x]dx+[∂U/∂y]dy ∂U/∂x=α(x − γ)α-1(y − δ)β…
Q: A maximizing consumer with preferences u = x^(1/2)+ y^(1/2) pays pY= 4 and pX= 4 and spends 24…
A: Indifference curve: It can be defined as the possible combination of two goods that provide the same…
Q: As a consumer moves along an indifference curve, then each point to the right will show higher…
A: Indifference curve is an indicative curve for any firm which shows combination providing equal…
Q: Suppose that the following utility function is given U(X,Y) = x +Y. Which of the following is…
A: D) We have non-convex preferences since Law of diminishing Marginal Rate of Substitution fails to…
Q: Question 1 There are four utility functions defined as follows: U(x,y) 5 ln r +6 ln y U2(x, y) = r+y…
A: Solution1: We have U1x,y=5lnx+6lny .... (1) U3(x,y)=x5y6 .... (2) and…
Q: A consumer has income I and faces prices p1 and p2 for goods 1 and 2. The corresponding quantities…
A:
Q: True or false. Assuming utility positively depends on two goods, indifference curves can be upward…
A: An indifference curve is a graph that depicts the combination of two commodities that provide equal…
Q: 4) State which well-behaved preference assumptions are violated by: a. indifference curves with…
A: The economics as a study is based upon the rationale of scarcity. Under this, the economies, and the…
Q: If a person's indifference curves can be represented as a straight line, the person views the goods…
A: The Indifference curve (IC) shows the various bundles of two goods that the consumer agrees to…
Q: ity = XY + 3X. If prices of X and Y are Birr 4 and Birr 2 respectively; and if a consumer has an…
A: Utility refers to the satisfaction. The aim of the consumer is to maximize the utility given the…
Q: t is the property of indifference curve that no two ICs can intersect each other because: a. same…
A: According to the ICs property that two ICs cannot intersect each other- The arcs of indifference…
Q: if both x1 and x2 are "bads", utility will increase i) As x1 or x2 increases ii) As the marginal…
A: Dear student, as you have posted multiple questions but according to the policies and guidelines of…
Q: Consider the utility function u(x, y) \x+2y+1/ (a) Find the equation for the marginal utility for x…
A: Disclaimer: Since you have posted a question with multiple sub-parts, I am providing you with the…
Q: Question 8 Given the utility function U = 2x+5y, what is the equation of the indifference curve that…
A: Utility refers to the satisfaction derived from the consumption of good. The utility function shows…
Q: The Slutsky matrix below belongs to a consumer with a regular utility function of three goods, with…
A: As we know that Slutsky matrix is symmetric matrix. Therefore, By solving the metrics we can find…
Q: Suppose that the following utility function is given U(X,Y) = x2+Y Which of the following is…
A: A utility function is said to be convex utility preference if its quasi concave which implies the…
Q: Suppose a consumer consumes two goods, X and Y. The slope of the budget constraint equals the a.…
A: A budget constraint illustrates the various combinations of two goods that a consumer can purchase…
Q: Which feature of indifference curves guarantees this result? a. Concavit of indifference curves b.…
A: An indifference curve(IC) is a locus/contour of the different bundle that has the same utility at…
Q: T/F Explain If preference is strongly convex, the utility function will exhibit dimin- ishing…
A: The satisfaction or benefit acquired from consuming a product is referred to as utility;…
Q: Question 342. Under Marginal utility analysis, utility is assumed to be a A. Cardinal concept B.…
A: Marginal Utility can be referred to as the additional Utility obtained from the consumption of an…
Q: 1. Graph a typical indifference curve for the following utility functions and determine whether they…
A: Law of diminishing marginal utility states that every additional unit consumed provides lesser and…
Q: Suppose that one of your friends does not care if she consumes spaghetti (S) or noodle (N). She…
A: When the price of S is greater than the price of pri9ce of N, then the person consumes only the good…
Q: Refer to Figure#4. Which of the following statements is NOT true for a consumer who moves from point…
A: An indifference curve is a locus of all combinations of two goods or services that provide the same…
Q: Suppose that the following utility function is given U(X, Y) = -X¯1+Y¯1. Which of the following…
A:
Q: For each of the following utility functions draw the indifference curve that passes through (1,1).…
A: To draw indifference curve , we just fix the utility to any arbitrary number and take some points.
Q: Assume an individual’s preference for Fanta (Good x) and Fritters (Good y) are given by the…
A: Given that the utility function for both good x and good Y are U(x,y) = 20 = x^0.5y^0.5
Q: Q.2 The slope of the indifference curve is equal to which of the following? A. One B. Marginal…
A: According to the given question Indifference curve was first named by the economist Pareto it…
Q: Which form of utility is expressed on ranking the bundles According to preferences
A: In economics, the satisfaction derived from the consumption of a good or service is calculated in…
Q: If the utility function is : u= q1q2. find the slope of an indifference curve. What will be its…
A: Slope of indifference curve = Marginal rate of substitution (MRS).
Q: Prove that the utility maximization conditions as suggested by the “marginal utility framework” are…
A: Individuals and organizations take a stab at the most significant level of pleasure from their…
Q: Could Figure 3.2 be a single indifference curve if preferences are monotonic?
A: Answer - Monotonic Preference :- These are the Preference which means that a rational individual…
Q: Consider the following utility function: U= 4X+Y. A consumer faces prices of P,= $2 and P, =1. %3D…
A: Answer: Given, Utility function: U=4X+Y The formula of the marginal rate of substitution (MRS) is…
Q: Indifference curves are convex to the origin because of: A) the assumption that more is preferred to…
A: Indifference curve shows combinations of two goods that give same level of utility to consumers.
Q: Under Marginal utility analysis, utility is assumed to be a
A: Under Marginal utility analysis, utility is assumed to be which concept:
Q: The non-satiation assumption we make about people's's preferences entails that the indifference…
A: Indifference curve shows combinations of two goods that give same level of utility.
![Answer All questions
1) a) Given the following typical utility curves determine whether they have convex indifference
curves (that is, whether the Marginal Rate of Substitution declines as x increases).
U(x, y)=/x - y
b) Given the following Constant Elasticity of Substitution production function, show whether
or not it is homogeneous, and the scale it exhibits. Q= [L² + K³]3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b64a229-f0e7-44b0-8005-0b79310437ee%2F982afb85-bca2-4e81-9e76-2523efb00bc3%2F9dr8s8h_processed.jpeg&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Gıven two inputs X1 and X2 with Prices W1 and W2, and a production function Y=F(X1X2) show that the marginal rate of substitution between the two inputs is equal to the ratio of their prices.Answer the Constrained Optimization: Cobb-Douglas Production Function:1. Based from the factor shares of the two inputs, what will happen to the number of output ifit the firm decides to triple both the amount of labor and capital?2. State the optimization problem of the firm.3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product ofCapital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combinationof K and L that the firm should use to produce the maximum possible output. Do not solvethe problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces?Consider the production function Q = 2(KL)0.5 c) What is the elasticity of substitution at a point K = 1, L = 1 if we increase K by one unit?
- Given a production function of this nature; AX1aX2b determine the Marginal Rate of Technical Substitution.With its current levels of input use, a firmʹs Marginal Rate of Technical Substitution is 5 (when capital is on the vertical axis and labour is on the horizontal axis). This impliesA. the firm could produce 5 more units of output if it increased its use of capital by one unit (holding labour constant).B. the marginal product of labour is 5 times the marginal product of capital.C. the marginal product of labour is 1/5 times the marginal product of capital.D. if it used one more unit of both capital and labour, the firm could produce 5 more units of output.Constrained Optimization: Cobb-Douglas Production Function:1. Based from the factor shares of the two inputs, what will happen to the number of output if it the firm decides to triple both the amount of labor and capital?2. State the optimization problem of the firm.3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product ofCapital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combinationof K and L that the firm should use to produce the maximum possible output. Do not solvethe problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces?
- For the typical Cobb-douglas function, q=AKaLb whereas APL / APK = 1 , find out the marginal rate of technical substitution.Define marginal rate of substitution.The marginal rate of technical substitution of L=2K means that the firm can substitute 2 units of capital for an additional 1 unit of labor in the market. True or false.
- Consider the following equation Q = f(K, L) = K0.7 L0.3 Find (d) Equation representing an isoquant and show that it is convex to the origin (e) Elasticity of substitution (f) Output elasticities of factorsThe marginal rate of substitution of both of them are not correct.Answer the Constrained Optimization: Cobb-Douglas Production Function:3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product of Capital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combination of K and L that the firm should use to produce the maximum possible output. Do not solve the problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces