(5E)I need an urgent answer for this one! Instructions: 1. Show your complete solution to the problem. 2. State clearly your assumptions in your solution. 3. Type only the solutions here, please do not handwritten it. Make sure to make your equations, formulas and solutions clear and right.Please answer all the parts!I will click thumbs up if I'm satisfied with your service. 1. Assume you spend your entire income on two goods X & Y with prices given as Px & Py,respectively. Prices and income (1) are exogenous and positive. Given that U =X² + Y°,derive the Marshallian demand function for good Y and evaluate the type of good.2. Assume you spend your entire income on two goods X & Y with prices given as Px & Py,respectively. Prices and income (I) are exogenous and positive. Given that U= X'Y',derive the Hicksian demand function for good Y.

*Hi there , as you have posted multiple questions as per our guidelines we can only solve one at a…

1. Assume you spend your entire incomc on two goods X & Y with prices given as Px & Py, respectively. Prices and income (1) are exogenous and positive. Given that U = X + Y', derive the Marshallian demand function for good Y and evaluate the type of good.

1. Assume you spend your entire incomc on two goods X & Y with prices given as Px & Py, respectively. Prices and income (1) are exogenous and positive. Given that U = X + Y', derive the Marshallian demand function for good Y and evaluate the type of good.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.3P

See similar textbooks

Related questions

Q: Why would a tirm be happy to cam zero economic protts? Because zero oeonomic profit means that the…

A: Accounting profit = Total revenue – total cost Economic profit = accounting profit –…

Q: Question 1 When building a chair, a carpenter uses 5 pounds of wood and 3 ounces of glue. If the…

A: Wood and glue are complementary goods in production of chair.

Q: The General Service Contractor Company paid $400,000 for a house and lot. The value of the land was…

A: The information given is:- The General Service Contractor Company paid $400,000 for a house and lot.…

Q: Give example of a trade policy in developed country or region, and explain how does this policy…

A: International trade is included in globalization and helps the country to develop.

Q: Economics Question 9 Consider the IS curve Yt = ā – 6(R – F)], where b = 2, = 1/5, and Rų – 7 =…

A: We are going to find percentage change in output to answer this question

Q: 50 II 40 30 IV 20 10 10 20 30 40 50 Number of Turkeys Number of Chickens

A: Opportunity cost refers to the cost associated with the trade-off between two goods or services when…

Q: Suppose the economy is in long-run equilibrium and wealth increases. In the short- run, the…

A: Long-run equilibrium denotes full employment equilibrium. It denotes the optimum amount of output…

Q: al firms with no cost and demand curve P%3D20-2Q compete using the

Q: Suppose an economy has 10,000 people who are not working but looking and available for work and…

A: Given:- Unemployed people(people who are not working)=10,000 People employed(or working)=90,000 To…

Q: What is the size of the labor force in the United States in percentage terms of the population?

A: Labor force refers to a people which are either employed or unemployed in the country.The labor…

Q: If an economist states the following event occured in a market "The quantity demanded has…

A: Demand curve shows different combinations of price and quantity demanded.

Q: (Figure: Short- and Long-Run Equilibrlum I) Use Figure: Short- and Long-Run Equlibrium . If the…

A: Long run equilibrium is achieved where LRAS = AD = SRAS . In Long run equilibrium economy is at…

Q: QUESTION THREE 3.1 Discuss two (2) cases of price elasticity of demand. Use diagrams to motivate…

A: The measure that depicts percentage change in quantity being demanded with respect to change in…

Q: A central bank carries out a contractionary open market operation *Another way of achieving the…

A: Monetary policy is the policy that the central bank of a country undertakes to control and influence…

Q: 6) A firm's short-run revenue is given by R=10e -e², where e is the level of effort by a typical…

A: The short run is a notion that asserts that at least one input is constant while the others are…

Q: show solution

A: The cost is the expenditure that is incurred in the production of goods and services. The cost is…

Q: 2. An investment of 105,815.40 can be made in a project that will produce a uniform annual revenue…

A: An investment of 105,815.4 a uniform annual revenue of 53,000 for 5 years a salvage value of 30,000.…

Q: True or False ? Ben Bernanke believes that Milton Friedman and Anna Schwartz’s explanation of the…

A: Investors and savers' best friend. Friedman believed that instead of trying to grow the economy by…

Q: The manager of a Pittsburgh shop wishes to sell on eBay a used telescope that is in good condition,…

A: The average amount that a prospective buyer is willing to pay: (Probability)(High Quality) +…

Q: Question The government is trying to decide whether to impose a $0.35 tax on the firms or the…

A: Demand curve is a downward sloping curve and supply curve is an upward sloping curve. Equilibrium is…

Q: Suppose K = 1000, total amount of capital available for production L= 2000, total amount of labor…

A: Production Function The production function shows depict the interaction of Two components in the…

Q: Discuss the ways that running a trade deficit could result in either a healthy economy or a weaker…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Consider the IS curve Y = T-lā – 6(R – F), where b = 2, = 1/5, and R - ř = 0.01. || If there is a…

A: A demand shock is a rapid and transient surge or fall in demand for a single item or a group of…

Q: An adverse weather condition can change the supply of a product.” It can be represented as a: a.…

A: Supply curve shows different combinations of quantity supplied and prices

Q: Demand: P- 825 - 0.15QD Supply: P- 25 + 0.25Q5 (5 points) Calculate the equilibrium price and…

Q: Discuss the type of price control that can be implemented by a government to protect vulnerable…

A: Introduction : The price control implemented by government in labour market → minimum support price…

Q: “Decreasing the supply of crude oil raises the crude oil price. When the crude oil price goes up,…

A: In economics, the concept of demand and supply is widely used to determine the market outcome as any…

Q: 1) In the medium run monetary and fiscal policies are neutral. 2) An increase in the workers…

A: Since you have posted a question with multiple sub-parts, we will solve first three questions for…

Q: Without using equations and / or graphs and using a maximum 150 words, provide an intuitive account…

A: The necessity to address the usual trade-off between trade coverage and data quality led to the…

Q: Which of the following statements is TRUE?

A: The value of spending multiplier is dependent on MPC and as well as MPS

Q: Explain how governments enact trade policies globally, regionally, and at the national level. What…

A: The government links trade strategies by considering the country's commodities demand and the level…

Q: Explain how and why the "invisible hand" works to ensure that producers provide quality services and…

A: Invisible hand is simply the idea of how the market gets sorted through the forces of demand and…

Q: Compare and contrast the way that monopolistic competitors set price with the way that perfectly…

A: In general equilibrium theory, "perfect competition," sometimes known as "atomistic competition," is…

Q: If two identical firms with marginal cost 5 and demand curve P=70-20 compete using the Cournot…

A: Cornout model Let's assume there are two firms, i.e., firm A and firm B. Qa is quantity produced by…

Q: (Figure: Price Controls in the Market for Strawberries) Use Figure: Price Controls in the Market for…

A: Price control aims to preserve the welfare of the public by establishing a minimum and maximum price…

Q: 3.

A: The outcome of a situation of interactions between persons with competing interests is studied by…

Q: A firm faces the demand curve: P = 1,350 - 8Q. What is the firm's revenue maximizing price? Enter as…

A: Total revenue is the product of price and quantity.

Q: Assume the following: i. The public holds no currency. ii. The ratio of reserves to deposits (0) is…

A: Given the reserve ratio = 0.10 Demand for money, Md=Y(0.81 - 3.7i) Monetary base = $67 billion…

Q: Consider the Ramsey Model of the macroeconomy. Explain using a phase diagram how an economy starting…

A: The Ramsey-Cass-Koopmans model, sometimes referred to as the Ramsey growth model, is a neoclassical…

Q: Which of the following actions by the Fed would cause interest rates to fall? A. Raising the…

A: The Fed can change the money supply by open market operations and by changing the reserve…

Q: Question 10 Cohn and Sitwell, Inc., is considering manufacturing special drill bits and other…

A: according to the question, The staff believes that an average return on equities "in general" of 18…

Q: Assume that nominal GDP is $2,800 billion and the real GDP is $2,000 billion. What is this economy's…

A: A price index is a number that expresses the level of a set of commodity prices in proportion to the…

Q: An Engineer has acquired a dump truck for Php 750,000. It is expected that the new truck will…

A: Annual worth or AW is referred to as the easy way of understanding the annual amount, for instance,…

Q: State the implications of the weak axiom of revealed preference (WARP) for consumer choice. The…

A: Given information Weak axiom of reveled preference theory state that when consumer give preference…

Q: An investment of 105,815.40 can be made in a project that will produce a uniform annual revenue of…

A: An investment of 105,815.4 a uniform annual revenue of 53,000 for 5 years a salvage value of 30,000.…

Q: Ašsümė the following: i. The public holds no currency. ii. The ratio of reserves to deposits (0) is…

A: Money demand can be defined as the amount of money that the domestic residents of a country wants to…

Q: In the market for Widgets, the equilibrium price is $ 20 and the equilibrium quantity is 5000…

A: We have equilibrium in market where price is $20 and equilibrium quantity is 5000

Q: It is known that Qd = 80-2P and Qs = -10 + P Question: a. Draw it in a graph! b. If the government…

A: Qd = 80-2P Qs = -10 + P

Q: During the economic crisis of the 1970s, the economy was suffering from high levels of inflation.…

A: Monetary policy the Government or central bank used to settle down the Inflation and Recession in…

Q: The figure shows the graphs of the cost and revenue functions for a company that manufactures and…

A: Break-even is the point where the firm earns zero profit. This means Total Revenue equals the Total…

Question

(5E) I need an urgent answer for this one! Instructions: 1. Show your complete solution to the problem. 2. State clearly your assumptions in your solution. 3. Type only the solutions here, please do not handwritten it. Make sure to make your equations, formulas and solutions clear and right. Please answer all the parts! I will click thumbs up if I'm satisfied with your service.

1. Assume you spend your entire income on two goods X & Y with prices given as Px & Py,
respectively. Prices and income (1) are exogenous and positive. Given that U =X² + Y°,
derive the Marshallian demand function for good Y and evaluate the type of good.
2. Assume you spend your entire income on two goods X & Y with prices given as Px & Py,
respectively. Prices and income (I) are exogenous and positive. Given that U= X'Y',
derive the Hicksian demand function for good Y.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

1. Assume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U = X2 + Y2 , derive the Marshallian demand function for good Y and evaluate the type of good. 2. Assume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U= X2Y2 , derive the Hicksian demand function for good Y.3. Suppose that initially PX = 2, PY = 8, I = 96 and the Marshallian demand function for good Y is given by Y∗ = (0.5I/ PY)+(0.5PX/PY)− 0.5. Calculate the own price & income elasticities of demand for good Y. Interpret your computed values and say something about the type of good.4. Suppose the economy has 100 units each of goods X and Y and the utility functions of the (only) 2 individuals are: UA (XA,YA) = X0.25Y0.75, UB (XB,YB) = X0.75Y 0.25Show that pareto-improvement is possible if,…
Assume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U= X2Y 2 , derive the Hicksian demand function for good Y.
Suppose that i’s preferences over goods x and y are represented by the following utility function Ui(x, y)=x^0.8·y^0.2. Let m denote the consumer’s income, p denote the price of good x and let the price of good y equal 1. a) Find the Marshallian demand functions for goods x and y. b) Show how each of the demand function is affected by a change in the price of good x. c) Which of the goods is an inferior good?
An individual has $12 dollars to spend on the two goods (y=12). The price of good #1 is $2 (p1=2) and the price of good #2 is $6 (p2=6). How much of good #1 will the individual demand and how much of good #2 will the individual demand if their utility function is given by the following expression: U (q1 , q2) = q1 +2q2 a.) Quantity demanded of good #1 = b.) Quantity demanded of good #2 =
Suppose U = 2X + Y, I = 20, Px = 2, and Py = 2. (a) Find Marshallian demand for X and Y . (b) What is Marshallian demand for X and Y if the price of X increases to 5? How much of the change in demand for X is the income effect and how much is the substitution effect? (c) How much is compensating variation for the price change described in part (b)? (d) How much is equivalent variation for the price change described in part (b)? ( Please solve all the subparts ASAP I will give you thumbs up . )
The market for cellular phones has seen a combination of improving telecommunication technology and rising consumer incomes. Suppose you are told that the price of cellular phones decreased over the past five years. The decreasing prices of cellular phones, a normal good, implies that the magnitude of: A. he rightward shift of the demand curve is greater than that of the rightward shift of the supply curve B. The leftward shift of the demand curve is greater than that of the rightward shift of the supply curve C. The rightward shift of the demand curve is less than that of the rightward shift of the supply curve D. The rightward shift of the demand curve is less than that of the leftward shift of the supply curve
Suppose that we can represent Joyce's preferences for cans of pop (the x-good) and pizza slices (y-good) with the utility function min[4x,5y]. a) Find her Marshallian Demand Functions. b) Find her Hicksian Demand Functions
Suppose your utility for goods x1 and x2 is represented by the following utility function: U(x1,x2)= x11/5 x24/5 a) What is your marginal rate of substitution, MRS12? b) If the price for good x1 is p1 = 2, the price for good x2 is p2 = 4, and your available income is m = 20, write down your budget constraint. c) Using the prices and income given at b) above, find your optimal consumption choice bundle (Marshallian demand) and its corresponding utility level. d) Illustrate your optimal consumption choice on a graph. e) For the prices given in b), what income would you need to achieve a utility level of 25? PLEASE ONLY ANSWER PART C, D AND E
Suppose your utility for goods x1 and x2 is represented by the following utility function: U(x1,x2)= x11/5 x24/5 a) What is your marginal rate of substitution, MRS12? b) If the price for good x1 is p1 = 2, the price for good x2 is p2 = 4, and your available income is m = 20, write down your budget constraint. c) Using the prices and income given at b) above, find your optimal consumption choice bundle (Marshallian demand) and its corresponding utility level. d) Illustrate your optimal consumption choice on a graph. e) For the prices given in b), what income would you need to achieve a utility level of 25?
Now, imagine that instead of the subsidy the UK government had responded to the cost-of-living crisis by subsidising both energy and food demand through a subsidy to producers resulting in a reduction of both energy prices and food prices by 10%. Using the same indifference curve of point a., what is the optimal level of consumption of energy following such intervention? How much of the change in quantity of each good consumed is due to an income effect and how much to a substitution effect? please could you answer this showing a diagram of the indifference curve movement. could you do food on the y axis and energy on the x axis.
Suppose a consumer in a competitive market maximises utility subject to a standard budget constraint. a. Given their resulting demand function, what assumptions would be required for one to conclude that when the price of good 1 goes up the consumer buys less of that good?b. Given their resulting demand function, what assumptions would be required for us to conclude that when the price of good 1 goes up the consumer buys more of good 2?
The utility function of a certain consumer is U =(x1,x2)= x11/3 x22/3 , x 1and x 2 is the consumption of two kinds of goods, and the consumer's income is 100. The current prices of the two kinds of goods are P 1 =1 and P 2=2 respectively, ask: 1. If the price of the first commodity increases from 1 to 2, and other factors remain unchanged, what is the total effect of the price increase on the consumption of the first commodity? According to the Slutsky decomposition principle, what are the income effect and substitution effect? 2. Calculate the amount of income compensation that changes the price of the first commodity from 1 to 2, keeping the original effect unchanged