A consumer is in equilibrium and is spending income in such a way that the marginal utility of product X is 40 units and that of Y is 32 units. If the unit price of X is $5, then the price of Y must be:

Q: Which of the following statements is true?     Total utility is the extra satisfaction from the…

A: Utility refers to the satisfaction received from consumption of a good or service. In other words,…

Q: Walt has utility function u = x + y. He has an income of $240. If the price of good x changes from…

A: The given utility function is of perfect substitutes and in this type of utility function consumer…

Q: To remain in consumer​ optimum, a price decrease requires(blank) in consumption. A price increase…

A: 1. As per law of demand, decrease in price will result in increase in demand.   A price decrease…

Q: Diminishing marginal utility refers to the fact that demand declines as income falls. additional…

A: The total utility is the total satisfaction received by the consumer by consuming goods and…

Q: Derive the Slutsky equation from the starting point that: x(р,, р,, М) %3D х. (Р,, Ру, x. (P,, P,,…

A: Slutsky Equation is defined as the equation which shows the total change in demand consists of the…

Q: 44) A person is in equilibrium when marginal utility per dollar equals 1. False True

A: When a consumer spends his given income on the purchase of certain goods in such a way that he…

Q: Assume that a combination of two goods reflects a point of tangency between the budget line and an…

A: In consumer theory, the combination of goods and services that a consumer can acquire for his or her…

Q: if the price of a good increase and the good is a normal good the budget constraint will pivot…

A: Budget constraint: It refers to the goods and services a person can buy from their budget. It is the…

Q: The MU of the last unit of good A consumed is 4 utils and the MU of the last unit of B consumed is…

A: Utility is maximized when marginal rate of substitution is equal to price ratio of goods. Marginal…

Q: The marginal utility of the last unit of apples consumed is 10, and the marginal utility of the last…

A: The ratio of the marginal utility of two products is equal to the ratio of prices of the two…

Q: Irene spends all of her income M on soda and chips. The price of soda is 2 per unit. Irene’s utility…

A:

Q: If a consumer always wishes to consume peanut butter and jam in fixed proportions, he treats these…

A: The consumer either uses jam or peanut butter in normal cases if the price of jam increases then the…

Q: Suppose an individual's utility function is given by the following expression: U (q1 , q2) = min…

A: Individuals (consumers) directly concerned within the acquisition, use, and disposal of economic…

Q: A decrease in the price of Good Y can result in a decrease of the quantity of Good Y demanded by…

A: Meaning of Substitutes Goods: The term substitutes goods refer to the situation under which there…

Q: A consumer has $600 to spend on good x and y. Her preferences can be represented by the utility…

A: Given; Income of the consumer= $600 Utility function; U(x,y)=y+100In x Price of good x= $10 Price of…

Q: The marginal rate of substitution is the maximum number of units of good Y that the consumer would…

A: Option -: All of the above is correct The marginal rate of substitution is defined as the…

Q: Consumer spends $450 per week on two goods, X and Y. PX= $5 and PY=$3. His utility function is U=…

A: Given,  U= 0.5xy2

Q: When utility function  U(q1, q2)=min{ 34.6 q1,  17 q2} and  q1= 33 and q2= 60 are given, find…

A: A utility function represents the preferences of a consumer if the consumer has a preference…

Q: In the below figure, a consumer is initially in equilibrium at point C. The consumer's income is…

A: Indifference curves are defiend as the locus of all the points with equal level of satisfaction.…

Q: Suppose a consumer has preferences between two goods that are perfect substitutes. Can you change…

A: In economics, the price of a good and the quantity consumed are inversely related. When the price…

Q: Which of the following utility functions represent preferences that always result in an interior…

A: Interior solution occurs when the optimal combination of goods and services have positive quantities…

Q: Let U(x, y) = 3x + y be the utility function of a consumer, who has a budget of I. As a function of…

A: U (x ,y ) = 3x + y  PX = PY = 1  Budget Constraint : px(x) + py(y) = I  Walrasian demands are simply…

Q: Suppose the price of A is $2 and the price of B is $3 and that good A is plotted on the horizontal…

A: As given price of good A is $2 and price of good B is $3. After that price of good A double that…

Q: In Problem 6, Elmer's utility function is U(x, ) = min{x, y²}. If the price of x is $20, the price…

A: From the utility function, we know x and y are complements  Thus, x=y2 When y= 8 x = (8)2 = 64if 8…

Q: A consumer is in equilibrium and is spending income in such a way that the marginal utility of…

A: The consumer is consuming two goods, X and Y in equilibrium. MU from X=20units MU from Y=35units…

Q: An individual utility function is given by U(x,y) = x·y. This individual demand (optimal purchase)…

A: Given  Individual utility function: U(x,y) = xy  ......... (1)  Let px and py be the price of good x…

Q: The price of goods A and B are 20 and 10 respectively. given that the marginal utility of commodity…

A: Marginal utility is the extra utility experienced with the consumption of an additional unit of a…

Q: In the below figure, a consumer is initially in équilibrium at point C. The consumer's income is…

A: We have two goods X and Y and there is an Boucher of worth $150 for good X.

Q: Let U(x, y) = 3x + y be the utility function of a consumer, who has a budget of I. As a function of…

A: U (x ,y ) = 3x + y  PX = PY = 1  Budget Constraint : px(x) + py(y) = I  Walrasian demands are simply…

Q: Question 8 An optimizing consumer will select the consumption bundle in which the marginal rate of…

A: Marginal Rate of substitution is the volume of good that a consumer is willing to consume in…

Q: Joe has utility function is U = ln(x) + 2(ln(y)). He has 2 units of x and 8 units of y. Price of x…

A: Utility function :  U = ln(x) + 2(ln(y))  Endowment : x = 2 , y = 8  Px = 1 , Py = P Therefore ,…

Q: The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last…

A: Marginal utility is the utility derived from the consumption of an additional unit of the good. When…

Q: Total utility (utils) 0 80 120 148 160 155 Quantity consumed per day 0   1     2     3…

A: Quantity consumer per day Total utility (utils) 0 0 1 80 2 120 3 148 4 160 5 155

Q: A consumer is in equilibrium when marginal utilities are

A: To find : When will consumer in equilibrium.

Q: Suppose that price of good X falls by 50 % while price of Y falls by 25% and Income falls by 50%.…

A: Assume the budget line before the change is : 10x+20y=200 Px=10 and Py=20 Price of x falls by 50%…

Q: Suppose the weighted marginal utility for two goods, x and y, at a position of consumer equilibrium…

A: Here, weighted marginal utility is given as 70 at equilibrium, it implies that MUm is equal to 70.

Q: For the consumer whose choices are shown in the diagram, the substitution effect of the price change…

A: Substitution effect is change in demand or consumption of  a commodity or a service due to a change…

Q: Explain how consumer equilibrium is reached using marginal utility analysis.

A: Utility refers to the power of a good to satisfy the wants of the people. Marginal utility refers to…

Q: If the utility function (U) between food (F) and clothing (C) can be represented as U =2F + 9C, the…

A: The utility is the amount of satisfaction received by the consumers from the consumption of goods…

Q: Marginal utility analysis predicts a downward-sloping demand curve for good X because... a. As PX…

A: Answer in step 2

Q: Given Utility function U=20Q-2Q^2, what quantity of good gives highest utility for the consumer?…

A: The utility (U) for a consumer is the amount of satisfaction procured or attained by an individual…

Q: As a person receives more of a good, the _______________ from each additional unit of the good…

A: Wants satisfying power of commodity called utility , here we choose the correct option and explain…

Q: Which of the following statements is correct? Multiple Choice   Marginal utility is the…

A: The measure that in turn depicts the total satisfaction that is being received from the consumption…

Q: A household with strictly convex preferences may consume only one of two goods.

A: Strict convexity of preferences may be a stronger property than simply plain convexity. Preferences…

Q: The substitution effect. Multiple Choice is generally so weak that its effect cannot be predicted.…

A: The price effect includes income effect and substitution effect. It is the summation of two effects…

Q: Bob views apples and oranges as perfect substitutes in his​ consumption, and MRS​ = 1 for all…

A: The marginal rate of substitution in economics is the amount of a good that a consumer is willing to…

Q: explain the consumer equilibrium condition according to the utility theory.

A: Utility: - Utility is the satisfaction derived by any consumer from consuming a good or service.

Q: Suppose the function for the utility from good c is denoted as U(c)=2c1/2 .  Which of the following…

A: Given  Utility function:  U(c) = 2c1/2.    ..... (1) Where have to find marginal utility from good c