Another utility function is given%3; U(X, Y) = X0.75 y0.25 %3D s.t. PxX+PyY=l What is the coefficient of the compensated demand function Y? Select one: O a. 0.46875 O b. 0.45875 O c. 0.42875 O d. 0.44875 O e. 0.43875
Q: Suppose that a consumer’s marginal rate of substitution at her current chosen bundle is MUx / MUY =…
A: Marginal rate of substitution is the amount of one good that the consumer is willing to consume in…
Q: Let a consumer's indirect utility function for two goods be described as follows: 20m 5p1 + P1 v(p,…
A: An indirect utility curve is a function of the consumer's income and the prices of the two…
Q: Assume an individual spends all of the their income on a bundle comprised of good #1 and good #2. In…
A:
Q: A consumer has Hicksian demands given by 1/2 Py Px 1/2 Y, = Ū Px Ру For which of the following…
A: Given Hicksian demand function: xh*=U¯pypx1/2 and yh*=U¯pxpy1/2 U¯=10 We will calculate the cost…
Q: For this part, solve for the utility maximization and cost minimization problems. Additionally,…
A: We are going to solve for Marshallian demands using Marginal Rate of Substitution method to answer…
Q: Find the producer's surplus if the supply function is given by S(x) = x + 4x + 20. Assume that…
A: Given : S(x) =x2+4x+20 equilibrium is achieved where x=24
Q: If a and ß are just parameters and if the direct utility function is u (x1, X2) = a · In(x1) + ß ·…
A: We have formula fro MRS = -MUx/MUy
Q: Which point will the consumer choose to maximize utility? O A. the point on the highest indifference…
A: A consumer maximizes his utility when MRSXY = PX/PY where MRSXY is marginal rate of substitution…
Q: Consider a consumer with the utility function u(x,y) = r*y, where a and b are both strictly positive…
A: Consumer preferences satisfy local non-satiation if, for any bundle (x, y), and any open…
Q: It measures of the rate at which a consumer can give up some amount of one good in exchange for…
A: As per the guidelines answer is given to the first question: "Indifference curves represents…
Q: A preference map consists of: O A. indifference curves, O B. points where the marginal rate of…
A: Indifference Curve refers to a line that shows combinations of goods among which a consumer is…
Q: Meera's budget line relating to good X and good Y has intercepts of 12 units of X and 10 units of Y.…
A: Budget line refers to all combination of good X and good Y that Meera is able to purchase given her…
Q: Time left 1:08:43 Suppose that, following a decrease in the supply of good X, we observe that the…
A: Given Given the supply of the good x the price of good y increases.
Q: A consumer has the utility function u(x,y) = xy and the price of both x and y are $4 a unit. If the…
A: Given Consumer utility function u(x,y)=xy ..... (1) The price of good x is $4 and the…
Q: The marginal rate of substitution (MRS) can be defined as: Select one or more: O a. The amount of…
A: The point at which indifference curve and budget constraint touch is called the optimal level.
Q: Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no…
A: Allow F and C to signify the farmer's last assignment of food and clothing. Setting MRS's equivalent…
Q: Elmer's utility function is U( x, y) = min{ x, y). If the price of x is $25 and the price of y is…
A: In economics, the utility function measures the welfare or delight of a customer as a characteristic…
Q: Suppose an individual only consumes two goods, X and Y. Which of the following statements is true? O…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Satisfaction resulting from the consumption of a particular commodity refers to Opportunity Cost. O…
A: "Opportunity cost represents the value which is foregone when choosing in between two or more…
Q: and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the 36) Answer the…
A:
Q: Diminishing marginal utility means that O a. as one consumes more of a good, other things constant,…
A: Total utility is defined as the total amount of satisfaction an individual is able to receive from…
Q: For the following questions consider a consumer with utility ulx, y) = xy + x. What is the…
A: Given: Utility Function: u(x, y) = xy + x Let I be income , px = price of good x , py price of good…
Q: Consider the consumer's problem. A uniform increase of both prices by 100% (so that both prices…
A: A uniform increment of the two costs by 100 percent (so the two costs twofold) We expect it to be :…
Q: When sales are being maximized, it is true that O demand is elastic. O profits must also being…
A: When a company sells as much of a good or service as it can without going out of business, this is…
Q: 1 explain With the aid of two well labelled diagram(s) with before and after transitions whether the…
A: When the indifference (IC) curve is convex to the origin, the consumer's equilibrium occurs at the…
Q: Assume that the prices of good X, Y and Z are as follows R5,R1 and R4 respectively, and the Judith…
A: In microeconomics, the function of U {"utility"} is described as a crucial term or concept in which…
Q: Suppose the consumer's utility function is given by U(x,y) =Vxy) The equation for this consumer's…
A: At optimal point, marginal rate of substitution is equal to the slope of budget line.
Q: Consumer A's utility function is UA(x1,x2)=min(2x,x2). Consumer B's utility function is Ug(x1,X2)=x*…
A: UA(x1, x2) = min(2x1, x2) UB(x1, x2) = x14x2 p1=10, p2=20 Budget constraint: p1x1+p2x2=M where M is…
Q: Let U(x,y) =V(xy) . Let I = $100, Px = $25 and Py =$10 be the initial set of prices and income. Now,…
A: compensating variation occurs where adjustment is made in income so that consumer is as well off as…
Q: Sheldon is very picky and his utility function of consuming cereal (C) and apple juice (A) is…
A: Two goods are perfect complements when they are consumed together. Min utility function shows that…
Q: Let u(x) be a utility function that represents % and let f(.) be a continuousmonotonic function.…
A: Monotonic transformation (MT) of a utility function (U) is a transformation by which when a set of…
Q: where q, is chocolate candy and q2 is slices of pie. If the price of slices of pie, p2, is $1.00,…
A: Given: Uq1,q2=q10.2q20.8
Q: Every month, a family of three spends $2,000 on food (F) and other items (O). The family’s…
A: The total income = M = $2000 The utility function, U(F,O) = F^1/5 O^4/5 The price of food = Pf = $1…
Q: [Nonlinear Budget Constraints] Suppose that Simone has preferences that are represented by the…
A: U(x,y) =xyIncome = 20
Q: When prices are (5, 3), Connie chooses the bundle (11, 4). When prices are (4, 16), she chooses the…
A:
Q: Select one or more: Oa Marco can reach point J by borrowing against his future income O b. Borrowers…
A: figure given in the question shows the individual’s intertemporal choice of consumption in the two…
Q: Another utility function is given%3; U(X, Y) = x°.75 Y0.25 s.t. PxX+PyY=I What is the coefficient of…
A:
Q: 4.13 CES indirect utility and expenditure functions In this problem, we will use a more standard…
A: The CES utility function is given as follows: The budget constraint is as…
Q: A consumer has a utility function given by U(x, y) = 3x + 2y. The price of x and y are both equal to…
A: U(x,y)= 3x2 + 2y2 Px= 1 Py= 1
Q: Consider the statement: "The success of a new product depends not only on its marginal utility but…
A: Utility: - Utility is the satisfaction derived by any consumer from consuming a good or service.…
Q: Goluki's preferences are given by the following utility function: U(qı, 42) = 9iª + ", 1/3 1/3 where…
A: Given Goluki's utility function: U(q1, q2)=q11/3+q21/3 .... (1)
Q: Suppose that a consumer's marginal rate of substitution at her current chosen bundle is MUx/MUy=3…
A: The marginal rate of substitution (MRS) is the slope of the indifference curve (in the question is…
Q: Consider a utility function of two goods x and y: U (x,y) = A (ax +by') where A >0, a>0, b>0, r €…
A: b) Slope of indifference curve= (-) MUx/MUy MUx= Ar(axr+byr)1r-1(arxr-1) MUy= dU/dY=…
Q: A consumer's utility function is U(x, y) = 4x + 3y. The price of x is 5 and the price of y is 2, and…
A: Utility Maximization is the situation where consumer gets higher satisfaction with given level of…
Q: Consumer A's utility function is U,(x,X2)=x+2x32, Consumer B's utility function is Ug(x,X2)=…
A: Utility function:- The utility function describes the happiness or enjoyment that consumers get from…
Q: Anya is currently consuming $1000 worth of consumption goods C and spending 30 hours in leisure L…
A: The indifference curve shows the combination of two goods that gives the same level of satisfaction.…
Q: Quantity of additional output arising from additional input is measured using Marginal Product. O…
A: The amount of products or the services that is produced in a certain time period is known as output…
Q: A consumer has a utility function given by U(x, y) = 3x? + 4y². The price of good x is 3 and the…
A: Utility is maximized when at optimum bundle, MUx/MUy = Px/Py
Q: Every month, a family of three spends $2,000 on food (F) and other items (O). The family’s…
A: The total income = M = $2000 The utility function, U(F,O) = F^1/5 O^4/5 The price of food = Pf = $1…
Solve this economic
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
- A4Gary's demand function for good X is xG = 0.5 M/p where p is the price of the good and M denotes Gary's income. What is the slope of the Gary's compensated demand curve, assuming p= 7 and M = 209 dollarsJoanna is playing blackjack for real money. She has reference-dependent preferences overmoney: if her earnings are m and her reference point is r, then her utility is v(m − r), wherethe value function v satisfies v(x) = √x for x ≥ 0, and v(x) = −2√−x for x ≤ 0a) Graph Joanna’s utility function as a function of m − rb) Does Joanna’s utility function satisfy loss aversion? Does it satisfy diminishingsensitivity?Suppose that Joanna has linear probability weights (that is, she does NOT have prospecttheory’s non-linear probability weighting function). Hence, if she has a fifty-fifty chance ofgetting amounts m and m′, and her reference point is r, her expected utility is1/2v(m − r) + 1/2v(m′− r) (2)For parts (c), (d), and (e), assume that Joanna’s reference point is $0 (that is, no winsor losses) and answer the following questions for each part: (i) What is the g for whichJoanna would be indifferent between not gambling and taking fifty-fifty win $g or lose$4 gamble? (ii) Does this reflect…1.Suppose that Chris's utility function is given by UC=QC1/2 RC1/2 , where QC and RC are his consumption of Q and R, respectively. Dana's utility function is given by UD=QD1/3 RD2/3, where QD and RD are her consumption of Q and R, respectively. Write an equation for the marginal rate of substitution (MRS) between Q and R for each of the two agents. 2.Suppose that the price of good R is pR=1 and the price of good Q is pQ=2. How much is Chris's and Dana's initial income, given his endowments and given these prices? 3. At these prices, how many units of Q would Chris and Dana want to consume? 4. At these prices, how many units of R would Chris and Dana want to consume?
- Q 2. Xinyi has an income of I = 140, and faces prices px = 1 and py = 2. Her utility function is U(x,y) = xy + x. (a) (a) Find her optimal consumption bundle, using the Lagrangian. (Note: You are not required to do so here, but it would be good practice to also solve for Xinyi's demand function for x by leaving prices and income as variables.).Let u(x) be a utility function that represents % and let f(.) be a continuousmonotonic function. f(x) is monotonic when x > y ⇐⇒ f(x) > f(y) a) Show that any monotonic transformation of the utility function (f ◦u) can also represent the same preferences.Lan's utility function is U = xa y1-a where x denotes her consumption of good X, y denotes her consumption of good Y and a = 0.8. The price of good X is Px = 7, the price of good Y is Py = 14 and Lan's income is M = 338. If each price increases by 2 dollars, how much money must Lan be given to compensate her for the price increase?
- Solve; a consumer utility function is given as 64q10.5q20.25q30.4 1. what is the marginal utility of consuming commodities q1, q2 and q3 2. derive the second-order partial derivatives of the utility function with respect to the three pairs of commodities 3. show the cross partial derivatives with respect to q1 4.what is her total utility when q1 is 24, q2 is 30, and q3 is 154. Two individuals, Amir and Budi, consume two goods, clothes (X) and shoes (Y). The utility functions for the two individuals are given as: Utility function of Amir, UA = 15X0.25Y0.75Utility function of Budi, UB = 25X0.5Y0.5 The current price for clothes (Px) is Rp 100,000 and the current price for shoes (PY) is Rp 150,000 a. Determine marginal rate of substitution (MRSXY)between clothes (X) and shoes (Y) for Amir and Budi! Please explain. b. Amir is currently consuming 5 units of clothes (X) and 10 units of shoes (Y), whereas Budi is consuming 12 units of clothes (X) and 8 units of shoes (Y). At this current consumption, have Amir and Budi reached the efficient allocation of clothes and shoes? If they have, explain why. If they have not, calculate the optimal allocation and explain. c. Considering the relative price between of clothes and shoes, at the current consumption, have Amir and Budi reached exchange equilibrium? Please explain d. Use the Edgeworth Box to illustrate the…4. Two individuals, Amir and Budi, consume two goods, clothes (X) and shoes (Y). The utility functions for the two individuals are given as: Utility function of Amir, UA = 15X0.25Y0.75Utility function of Budi, UB = 25X0.5Y0.5 The current price for clothes (Px) is Rp 100,000 and the current price for shoes (PY) is Rp 150,000 a. Determine marginal rate of substitution (MRSXY)between clothes (X) and shoes (Y) for Amir and Budi! Please explain. b. Amir is currently consuming 5 units of clothes (X) and 10 units of shoes (Y), whereas Budi is consuming 12 units of clothes (X) and 8 units of shoes (Y). At this current consumption, have Amir and Budi reached the efficient allocation of clothes and shoes? If they have, explain why. If they have not, calculate the optimal allocation and explain. c. Considering the relative price between of clothes and shoes, at the current consumption, have Amir and Budi reached exchange equilibrium? Please explain d. Use the Edgeworth Box to illustrate the…
- Assume, as in Exercise 22.1, that a consumer has utility function F or fruit and chocolate. Determine the consumer's demand functions q1(P1, P2, M) and q2(P1, P2, M). Determine also It* in terms of P1, P2 and M. Find the indirect utility function and show that It* = 8Vj8M. Suppose, as before, that fruit costs $1 per unit and chocolate $2 per unit. If the income is raised from $36 to $36.5, determine the precise value of the resulting change in the indirect utility function. Show that this is approximately equal to (O.5)λ*, where λ* is evaluated at P1 = 1,P2 = 2 and M = 36. Exercise 22.1 A consumer purchases quantities of two commodities, fruit and chocolate, each month. The consumer's utility function is For a bundle (X1, X2) of X1 units of fruit and X2 units of chocolate. The consumer has a total of $49 to spend on fruit and chocolate each month. Fruit cost $1 per unit and chocolate costs $2 per unit. How many units of each should the consumer buy…Assume an individual spends all of the their income on a bundle comprised of good #1 and good #2. In particular, their utility function is given by: U(q1,q2) = q12/3q21/3 Assume the price of good #1 is $1 (p1=1) and the price of good #2 is $3 (p2=3). What must the individual's income be if they maximize their utility by purchasing 10 units of good #1?Consider a consumer with utility function u(x1, x2) = α_1x_1^( 2) + α_2x_2^( 2) where α1 > 0 and α2 > 0. Assume that p1, p2 > 0.? (a) Derive expenditure function e(p, u). Verify that it is homogeneous of degree 1 in p and increasing in u. (b) Using expenditure function and Hicksian demand, calculate Walrasian demand and indirect utility