1. A consumer has a utility function u(x,x,)=x} +x3 and the budget constraint is ôv(p,I)/op; ôv(p,I)/ôI P,X; + P,x, = I, P» P2,I >0 . Check the Roy's identity o,(p,1) = for i = 1,2. 9(p,1) is the Marshallian demand function, v=v(p,I) is the indirect utility function.
Q: Suppose a consumer’s preferences can be represented by the utility function U(X,Y) = Min (2X,Y).…
A: Utility function: U = Min (2X, Y) --------------------- Budget constraint: Price of good X (Px) = $2…
Q: 1. Consider the utility function given by u (x1, x2) = x1x%, and budget constraint given by Pixi +…
A: Given information U=X1X22 Budget constraint P1X1+P2X2=W
Q: You are given the following utility function and price of commodities q1 and q2: U =…
A: Utility is maximized at the point where indifference curves are tangential to the budget constraint…
Q: 1.a Assume that a person’s utility function is given by the following function: ??=3?^(2/3)?^(1/3)…
A: Given, U(X,Y) = 3X2/3Y1/3 Price of X (PX) = £3 Price of Y (PY) = £3 Budget (M) = £45 Budget line…
Q: A consumer has the utility function u(x, y) = xy and faces the budget constraint 2x + y = 100. Find…
A: We are given: Utility function : u(x,y) = xy -- (1)Budget equation : 2x + y = 100 => y = 100 -…
Q: Find Indirect utility function of the following function U= max (X, Y) subject to the budget…
A: Maximize U = Max(X,Y) Subject to Px*X + Py*Y ≤M This is the problem with cornor solution, here at…
Q: Utility maximization under constraint Lucas gets utility (satisfaction) from two goods, A and B,…
A: Given information Utility function of Lucas U=25[C-3+4D-3]-4+25 Lets take Price of C=P1 Price of…
Q: Jack's preferences are represented by the utility function U = (X^0.4)*(Y^0.6). PX = 2, PY = 3 and h…
A: Utility is maximised at a point where marginal rate of substitution is equal to the price ratio of…
Q: Assume an individual's utility from consuming good #1 and good #2 is given by the following…
A: From the utility function, we can infer q1 and q2 are perfect complements and are consumed in fixed…
Q: What kind of preferences are represented by a utility function of the form u(71,72) = VE + z2? What…
A: The utility is the want satisfying power of the commodity. The utility is the want satisfaction of…
Q: Suppose Sky would like to spend Php 1000 to rent the badminton court (C) and study area (S) on a…
A: We have given that Rent of badminton court (P1)= Php 100 per hour Cost on study area (P2) =Php 150…
Q: Utility function: where p,=1, p;=2, Y=80 U=X0.75*70.25 • Use the Langrangian method to find optimal…
A: Part A) The equation of Budget constraints: X.Px+Z.PZ=Income(M)1.X+2.Z=80 Now, combining the BL and…
Q: Suppose that you have highly nonconvex preferences for ice cream and olives, like those given in the…
A: Preferences of a consumer is an important part to know the choices made by the consumer of a good.…
Q: Consider the classic consumer's choice problem of an individual who is allocating Ý dollars of…
A: Given information Two goods=C1 and C2 Price of good C1=P1 Price of good C2=P2 Income=Y Utility…
Q: Suppose a consumer's utility function is given by U(X,Y) XY. Also, the consumer has $720 to spend.…
A:
Q: 8. Show that if strict preferences > over three outcomes x, y and z, do not satisfy transitivity, so…
A: 8. The strict preferences are the preferences that are strictly preferred. For example if x is…
Q: Suppose Sky would like to spend Php 1000 to rent the badminton court (C) and study area (S) on a…
A: Sky utility function: U=C2S .... (1) Sky's budget m =Php 1000 Cost of one hour on…
Q: Utility maximization under constraint Lucas gets utility (satisfaction) from two goods, A and B,…
A: Given; Lucas's utility function:- U(A,B)=10A-2+B-2-2 Let; Price of good A=…
Q: A consumer utility function is U=(x1,x2) Where X1 is the quantity of good 1 that is bought, X2 is…
A: Optimality of utility is attained where utility is maximized subject to budget constraint.
Q: suppose that a consumer has a utility function U(x,y) = x1/3 y2/3 At the point (x,y) = (4,7) in…
A: The utility function is given as: U(x,y) = x1/3 y2/3
Q: Let the utility function and the budget constraint be as follows: u(x1, 82) = }Inxı + žln¤2…
A: Given utility function U=1/2lnX1+1/3lnX2 Budget constraint M=p1X1+P2X2
Q: Assume there is consumer, his utility function is u(x,y) =8 * x0.5+y , and his budget constraint is…
A: Given information U=8*X0.5+Y Budget constraint M=Px*X+Py*Y Py=1
Q: Answer the question on the basis of the following two schedules, which show the amounts of…
A: "Utility is maximized at a point where the ratio of marginal utility to price of one good equates…
Q: For the next two questions, consider a consumer with utility function U(x1, X2) = x1+X1X2+X2 who…
A:
Q: (d) The preferences of a consumer with utility function U (x1, x2) = (1+x1)(1+x2) are convex. [Note:…
A: Microeconomics refers to the branch of economics in which it studies the individual, household, and…
Q: What is the logarithmic transform of the utility function U= , given the budget constraint Pa, 21 +…
A: We have to find logarithmic transform of the utility function.
Q: Which bundle of goods will maximize Mrs. Bain's utility given her budget for days of horseback…
A: A budget set is a collection of consumption bundles that a customer may choose from based on his or…
Q: Suppose a consumer is indifferent between the bundles (x1, x2) = (19, 10) and (15, 16), and suppose…
A: Consumer choice refers to the choices that people make about products and services. When we research…
Q: Given a consumer has a money budget M = 90 and utility function ? ( ? , ?) = ? 1/4? 1 / 2 If she…
A:
Q: John has a utility function u(x1, x2) = min3x1, 4x2. If he has an income of £140 and faces prices of…
A: In the question above, it is given that : Utility Function : u(x1,x2) = min3x1,4x2 Income = £140…
Q: Violet buys pies (x) and champagne (y) with her income of $400 and her utility function over pies…
A: The budget line refers to the line that shows all the possible combination of two goods that a…
Q: Suppose m = 120, p1 = 10, and p2 = 15. The price p1 then falls to 6, keeping p2 and m fixed. Given m…
A: The budget line addresses different mixes of two products, which can be bought by a purchaser at the…
Q: (2) Consider the utility function u(x, y) := x'/³y²/3 for all nonnegative I and y. Given the budget…
A: Disclaimer: Since you have posted multiple questions, I am providing you with the answer to the…
Q: If a competitive consumer chooses consumption program x=(20,5,7) at competitive prices p=(2,1,5),…
A: Given information X bundle x=(20,5,7) at competitive prices p=(2,1,5) Y bundle y=(15,10,6) at…
Q: Suppose a family (with 1 child) earns $50,000 per year and there is no publicly provided education.…
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: Suppose consumer are always ready to trade k units of good X for w units of good Y. Then, which of…
A: In this case, the consumer is ready to trade k units of good X for w units of good Y. This means…
Q: Suppose that a typical consumer’s utility function is characterized by the following relation…
A: According to question resource available to the consumer is 160 birr . Taking birr as the currency…
Q: Finn is in charge of decorations for an upcoming festival, and he is planning to decorate with…
A: The budget line shows the alternate combination of two goods that can be consumed using the given…
Q: Starting with utility function U = U(X, Y) and budget constraint PxX+PyY=M, derive the equili- brium…
A: Utility function, U = U(X, Y) and budget constraint PxX + PY *Y = M
Q: PROBLEM (3) Violet buys pies (x) and champagne (y) with her income of $400 and her utility function…
A: Income:- financial gain is cash earned by someone or a business in exchange for labor, the…
Q: A consumer is maximising her utility function: U(r, y) = (105 + y0.5), subject to the budget…
A: Given information: Utility maximizing function: U(x,y)=x0.5+y0.52 Budget Constraint : 4x+2y=108
Q: Sylvia’s utility function over waffle fries, F, and frozen yogurt, Y is given by U = 2 ∗ F ∗ Y. Her…
A:
Q: I need asnwers of d,e,f. Assume there is consumer, his utility function is u(x,y) =8 * x0.5+y , and…
A: We are going to calculate MRS to find the optimal bundle of consumption in both the cases. To…
Q: Units of J MUj Units of K MUk 1 56 1 32 2 48 2 28 3 32 3 24 4 24 4 20 5 20 5 12 6 16 6 10 7 12 7 8…
A: Here Income of a consumer, and prices of J and K is given. Usi g the given information, a consumer's…
Q: 1 Consider a consumer who consumes only two goods, z1 and z2. His utility function is u (1, 2) = In…
A: Utility function is given as:- U(z1,z2) = lnz1+z2 Price of z1 = $2 Price of z2 = $4 Income = 100
Q: Suppose that consumer has the following utility function: U(X,Y)= X1/2y1/4. Suppose also that Px…
A: Given information: U = X1/2 Y1/4 --------> Utility function Price of X (Px) = 2 Price of Y (Py) =…
Q: Assume that a∈[-1,1] and θ∈(0,2). The utility function is given by u(a,θ)=a(θ-1). Which of the…
A: Ex-post is simply defined as 'after the event ' which can be associated with any event in hindsight…
Q: Assuming the two good case. When a person is attempting to maximize utility and income increases,…
A: Answer: When the income of consumers rises then the budget line shifts outward. In that case, the…
I want to get an answer to my questions. It is my 1st question which I sent you 30 minutes ago. But you didn't answer to my question.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should: a. Reallocate spending from magazines to newspapers. b. Reallocate spending from newspapers to magazines. c. Be satisfied because he is already maximizing his total utility. d. None of the aboveAnswer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products G and H. Units of G MUG Units of H MUH 1 36 1 70 2 33 2 60 3 27 3 55 4 21 4 45 5 18 5 30 6 12 6 25 7 6 7 15 If the consumer has a budget of $29 and the prices of G and H are $3 and $5, respectively, the consumer will maximize their utility by purchasing Multiple Choice 3 units of G and 4 units of H. 4 units of G and 2 units of H. 1 units of G and 5 units of H. 2 units of G and 5 units of H.A consumer consumes two goods and her utility is form by Cobb-Douglas utility function. Her MRS is 0.9 * (q2/q1) Using these information find Marginal utility levels of first amd second goods
- Which of the FF. statements is correct regarding the preference of the consumers when the income of the consumer can only be spent between apples and oranges? Assume that apples are written on the vertical axis while oranges are written on the horizontal axis A. when the consumer has few oranges, he is willing to trade more apple to get another orange B. when the consumer has so many oranges already, he will only exchange less apples for an orange C. the declining slope of the indifference curve shows the marginal value of oranges is declining D. all are correct E. none is correctSuppose a consumer is indifferent between the bundles (x1, x2) = (20, 10) and (15, 16), and suppose that the same consumer prefers the bundle (19, 9) to both. Is there anything wrong about her preferences when evaluated against the standard assumptions of consumer preferences?A consumer consumes pizza and soda always in the fixed proportion of 3 slices of pizza (x) with 2 cups of soda (y). Any pizza or soda not consumed together with the proportional amount of the other is useless to her. (a) Write down a utility function u(x,y) that represents her preferences. (b) If she has I = $60 budget and px = 4, py = 4, what is her optimal bundle? (c) In (b), If the price of soda increases to $6, how much money should she be compensated so that she achieves the same level of utility before the price increase? (d) Returning to (b), If the price of soda increases to $6, how much should the price of pizza be reduced so that she achieves the same level of utility before the price hike? (e) In (a), what values of a and b she is indifferent between the bundle "30 slices of pizza and a cups of soda" and the bundle "b slices of pizza and 40 cups of soda". Find at least two (a,b) pairs to get full points.
- Draw a budget constraint for an individual where if all income is dedicated to consumption of good X, the consumer can consume 40 units, and similarly, if the consumer dedicates all income to good Y 40 units can be consumed. What is the slope of the budget constraint? Draw in an indifference curve for this consumer showing an initial consumer equilibrium, with consumption of X and Y labelled. Now suppose that the price of good X falls such that 80 units of X could be purchased if the consumer dedicates all income to good X. What is the price ratio and slope of the new budget constraint? Draw in a new indifference curve tangent to the new budget constraint, together with consumption of X and Y. Identify the income and substitution effects graphically.A consumer has a perfect complements utility function, where she prefers to have one unit of H with each unit of G. Also, she has an income of $210. Assume that the price of H is $8 and the price of G is $6. What is the consumer's optimal choice for good G*? Group of answer choices 11 12 15 16Let Utility be given by U(x,y)=x^2 y^2 With a budget contraint p_x x+p_y y=Y Let px = 10 Let py = 2 Y = 100 Walk through the optimization process and identify the optimal choice for this consumer in both x and y (Hint: the MUx = 2xy2 and MUy = 2x2y) How much utility is this consumer receiving by consuming the optimal level of x and y? Use your answer in part b,the information from this problem, and excel to draw the budget constraint and the indifference curve at the optimal choice of x and y.
- You have the Cobb-Douglas utility function u(x,y) = xy over apples (x) and plums (y) and you have $120 budget to spend and can carry at most 480 ounces in weight in your backpack going back to the dorm. Each apple costs $1 and weighs 8 ounces, and each plum costs $3 and weighs 4 ounces. You can only leave the store with a bundle of fruits you can afford and carry. (a) Drawing the relevant lines, intercepts, marking the points and hence identifying the feasible set of bundles, calculate the optimal bundle. (b) Forget about (a). If you were to choose a backpack before going on this shopping trip, for the weight constraint not to be an issue for you, how many ounces of weight capacity would you need for your backpack? HINT: That is, for this weight capacity of the backpack, you’d be able to carry the best bundle you can afford, i.e, the weight constraint is not binding for your decision. ( c) Forget about (b). In (a), just before going out for shopping with your backpack to buy the…Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products J and K. Units of J MUj Units of K MUk 1 56 1 32 2 48 2 28 3 32 3 24 4 24 4 20 5 20 5 12 6 16 6 10 7 12 7 8 If the consumer has money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing Multiple Choice 3 units of J and 7 units of K. 5 units of J and 5 units of K. 4 units of J and 5 units of K. 6 units of J and 3 units of K.Assume that the data in the following table are an indifference curve for a consumer: a. graph this indifference curve and label "Quantity of Y" on the vertical axis and Quantity of X" on the horizontal axis. Label the points A-D. b. Assume the consumer's budget is $12 and the price of X and Y are $1.00 and $1.50, respectively. Draw the budget line in the above graph. c. what combination of X and Y will the consumer purchase? d. What is the value of the MRS and the slope (Px/Py) at consumer equilibrium? e. Beginning with the graph drawn in part (a), explain and draw graphs to derive demand curve for X Choice units y units of x A 10 2 B 6 4 C 4 6 D 2 12
