[5.5CP]Natasha's utility function is U(C, F) = (3 + F)VC, where C stands for concert tickets andF stands for film tickets. Her income is $300 per month and concert tickets cost $5 each.What is the formula for Natasha's MRSCF? Does it have the declining MRS property?Solve for and graph her price-consumption curve (allowing the price of film tickets, PF,to vary) and her demand curve for film tickets. For what values of Pf is her best choicean interior solution? For what prices is it a boundary choice?

Answer MRS = (3+F)/ 2C The MRS is diminishing. A price consumption curve (PCC) represents the…

Answered: [5.5CP]Natasha's utility function is…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 11SQ

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A consumer prefers to consume two commodities in fixed proportions. Specifically, she prefers to consume 1 unit of x2 and 4 units of x1 at the same time. Represent her utility function and find the most preferred and affordable consumption bundle for prices p1 and p2
Complete the following table and answer the questions below: Units Consumed Total Utility Marginal Utility 0 0 — 1 10 10 2 8 3 25 4 30 5 3 6 34 a. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know? b. True or False. “A rational consumer will purchase only 1 unit of the product represented by these data, because that amount maximizes marginal utility.” c. True or False. “It is possible that a rational consumer will not purchase any units of the product represented by these data.”
Q12. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F.Suppose as Case X, Total income is $100 and per unit prices of Food (F) and Cloth (C) are $2 and $15, respectively. a. What is the value of MRS at the optimal point and what does this value mean? b. What is the optimal consumption bundle i.e (F*,C*)? c. Plot the budget line and clearly depict the point of optimality in the F (x-axis)-C (y-axis) space.
Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF = $5 and PC = $20. (a) The maximum amount of food that Maria can consume is _____. (b) The maximum number of pieces of clothing that Maria can consume is ____. (c) Therefore the intercepts of Maria’s budget line are _____ F and _____ C. (d) Graph Maria’s budget line, with F on the vertical axis and C on the horizontal axis. (e) Maria (can, cannot) __________ afford to buy a combination of 200 F and 60 C because this combination of goods is located (outside, inside, on) __________ her budget line. (f) The slope of this budget line is _________. (g) The opportunity cost of one piece of clothing is ___ units of food. h) If Maria’s income rises to $3,000, the new intercepts of her budget line are _____ F and _____ C. (i) Graph this new budget line on your graph for item (d) above.
Maria spends all of her income of $2,000 on food (F) and clothing (C). The prices per unit are: PF = $5 and PC = $20. (a) The maximum amount of food that Maria can consume is _____. (b) The maximum number of pieces of clothing that Maria can consume is ____. (c) Therefore the intercepts of Maria’s budget line are _____ F and _____ C. (d) Graph Maria’s budget line, with F on the vertical axis and C on the horizontal axis. (e) Maria (can, cannot) __________ afford to buy a combination of 200 F and 60 C because this combination of goods is located (outside, inside, on) __________ her budget line. (f) The slope of this budget line is _________. (g) The opportunity cost of one piece of clothing is ___ units of food. h) If Maria’s income rises to $3,000, the new intercepts of her budget line are _____ F and _____ C. (i) Graph this new budget line on your graph for item (d) above. Question 2 Use the diagram below to answer the questions that follow. (a) What change could cause the…
Rohan’s current marginal utility from consuming peanuts is 100 utils per ounce and his marginal utility from consuming cashews is 200 utils per ounce. If peanuts cost $0.10 per ounce and cashews cost $0.50 per ounce, is Rohan maximizing his total utility from the kinds of nuts? Enter your responses as whole numbers. At the current level of peanut consumption, Rohan receives: utils per dollar.At the current level of cashew consumption, Rohan receives: utils per dollar.Therefore, Rohan maximizing his total utility because MUp/Pp is MUc/Pc.

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