Assume Jim consumes two goods: X and Y. He has a utility function of U=X²Y on bundles of (X, Y). The price for good X is twice the price of good Y. If Jim bought a combination of the two goods, and in doing so achieves a utility of 1000, how much of good X did Jim buy? a) 25 b) 5 c) 10 d) 20
Q: Bob views apples and oranges as perfect substitutes in his consumption, and MRS 1 for all…
A: Indifference curve is a curve that contains all the combinations of two goods which provide the same…
Q: Suppose a consumer’s utility function u is given by u(x) = x1 x22 where x1 and x2 are amounts of two…
A: Utility refers to the amount of satisfaction that is received by an individual from consuming a good…
Q: Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also, the consumer has $72 to…
A: Given, U(X,Y) = X1/2*Y1/2 Income of the consumer = $ 72 Price of X = $1 Price of Y= $1 Utility is…
Q: Ambrose's utility function is = 4x1 ^1/2 + x2. If the price of nuts (good 1) is $1, the price of…
A: A consumer will maximise its utility at a point where marginal rate of substitution is equal to the…
Q: Which statement BEST describes the principle of diminishing marginal utility?
A: C is the correct option and describes the principle of marginal utility.
Q: For each of the following utility functions, compute the marginal utility of good X (MUx) and the…
A: Answer: Marginal utility: marginal utility refers to the addition to the total utility when an…
Q: Suppose Pacó has an annual entertainment budget of I. He spends his entertainment budget on only 2…
A: Utility Function is given as U(v,m) = 4v1/2m. Price of Video games: Pv Price of Movies: Pm
Q: Suppose that Sam has a utility function u(x, y)= x+y where x is the amount of good 1 and y is the…
A: Py = 20 , px = 30 , px' = 10 and M=90
Q: Assume the demand for cherries is elastic and that the producer of cherries increases the price of…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Suppose a consumer's utility function is U(x,y) = min{x, y} For this utility function the optimal…
A:
Q: Consider the problem of a consumer who must choose between two types of goods, good 1 (x₁) and good…
A: Utility function: u(x1, x2) = x1 + x2 Marginal Rate of substitution = dudx1dudx2= 12x11 Price of…
Q: Suppose the utility function is represented by the following equation: U (X, Y) = XY + X + 2Y + 2…
A: A budget limitation refers to the different combinations of goods and services that a consumer can…
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: Suppose that a consumer with the utility function U = X0.75 Y 0.25 choses a bundle where X=10 and…
A: According to the given question, the utility function is given as U=X0.75Y0.25 With the bundle…
Q: Suppose that a consumer with the utility function U = X0.75 Y0.25 choses a bundle where X=10 and…
A: Marginal utility per dollar is the ratio of marginal utility to the price of the good. It increases…
Q: Consider an individual whose preferences are represented by the utility function U(x1,x2) = min…
A: Since you have posted multiple parts question, we will solve the first three parts for you. If you…
Q: Diogo has a utility function, U(q1, 92) = 91 0.8 0.2 92 where 91 is chocolate candy and q, is slices…
A: Lagrangian multiplier can be used to optimize an objective function subject to a particular…
Q: The utility function of a consumer regarding two goods x and y is given by U(x,y) = x^(7.9)y^(9).…
A: U(x,y) = x7.9y9 Price of x (Px) = 19 Price of y (Py) = 80 Total Income (M) = 10800
Q: The law of diminishing marginal utility says that... A. as a person consumes more and more of a…
A: The marginal utility is the satisfaction derived from the consumption of an additional unit. The…
Q: Suppose that a consumer with the utility function U = X^.75 Y^.25 choses a bundle where X=10 and…
A: Utility function: The utility function is a key concept in economics that assesses preferences…
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: Define marginal utility and Provide an argument why to maximize total utility of good x and good y,…
A: The want satisfying power of a good is termed as the utility. The summation of utility derived from…
Q: Consider the following utility function for goods x1 and x2: u(x1,x2)=(x1+x2)2 What type of…
A: Utility function is a representation of individuals preferences for goods and services.
Q: Suppose that consumer (has the following utility function: U(X,Y) = In(3X) + 2Y. What would be the…
A: Utility function: U = ln(3X) + 2Y ---------- Let's assume Px is the price of good X Py is the price…
Q: Suppose a consumer’s utility function is given by U(X,Y) = X1/2*Y1/2. Also, the consumer has $72 to…
A:
Q: ralph has a utility function u(x,y) = 0.5x + y and an income of $M. Let the price of x be $4 and the…
A: Consumer, consumes the good from which he get maximum $ marginal utility. If $ MUx = MU/px is more…
Q: Suppose there are 2,000 potential consumers in the Chestnut Hill market for tablet computers. All…
A:
Q: Mario consumes two goods: cars and motorbikes. An increase in the price of cars while holding income…
A: (A) increase the marginal utility provided by cars. Option "A" is correct. Marginal utility refers…
Q: When the price of good 1 decreases, the following is true (select all that applies): a) If good 1 is…
A: Goods refers to the products that meet human desires and give usefulness, such as a gratifying…
Q: Suppose Mary has the utility function U(x1, x2) = v(x;) + 2x2 with v such that v' > 0 and v" < 0.…
A: Given, Utility Function, U(x1,x2) = v(x1)+ 2X2, v such that v'>0 and V"<0 As mentioned, x1 =…
Q: Imagine a hypothetical consumer is using all of their income on two goods, X and Y. The price of…
A: Given Price of good X =$2 Price of good Y= $10 Additional units of utility from another unit of…
Q: Let a consumer's utility function be U(r, y) = r/2y/2. The consumer's income is I = 160 and prices…
A: In economics, utility function is an important concept that measures preferences over a set of goods…
Q: Diogo has a utility function, 0.2. 0.8 where q, is chocolate candy and q2 is slices of pie. If the…
A: The measure that illustrates satisfaction or welfare of a consumer being a function of the real good…
Q: TRUE OR FALSE? Maximilian consumes two goods, x and y. His utility function is U(x, y) = max{x, y}.…
A: Please find the attached answer os all three questions below-
Q: A consumer has S600 to spend on good x and y. Her preferences can be represented by the utility…
A: U(x,y)=100lnx+y Px=$10 Py=$5 M=$600 Optimal bundle is obtained when marginal utility per dollar of…
Q: Assuming that seafood is your favorite food. Would the law of diminishing marginal utility apply to…
A: The law of diminishing marginal utility states that, when the consumer consumes a commodity without…
Q: x0.25 y0.75 and has an income of As in question 2a, A consumer has a utility function given by U…
A: U = x0.25y0.75 MRS = MUxMUy = 0.25x-0.75y0.750.75x0.25y-0.25 = 1y3x Before Price change: MRS =…
Q: U = U ( x 1, x2) = (x1 + 2) 2 (x2 + 3) 3
A: The Marginal utility is a satisfaction which consumer derive by consuming one more unit of…
Q: derive and draw the Engel curve, x1(m) and the demand curve, x1(p1): U(x1, x2)=x11/3 x22/3 .
A: The satisfaction derived from the consumption of a good or a service is known as utility. It is…
Q: 1) Ambrose has the utility function U(x,x:) = 4x: + xX:. (X:: nuts, x:: berries). a) If Ambrose is…
A: The utility is the total satisfaction received when a good or product is consumed. The indifference…
Q: Jane's utility function is U=X^2Y^8 , with marginal utilities being MUX=2XY^8 and MUY=8X^2Y^7.…
A: Answer: Given, Utility function: U=X2Y8MUX=2XY8MUY=8X2Y7PX=1PY=3I=120 The budget constraint of this…
Q: Explain whether the following statement is true, false, or uncertain. A consumer consumes two…
A: In a market, if the goods are complements like butter and jam, then a increase in price of bread…
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: Optimal choice, example #4 Bob has utility function U(x,y)=x²+y over goods x and y. a) If Px=$30,…
A: * ANSWER :- The Income consumption curve shows the relationship between consumption of goods and…
Q: A consumer of two goods, good 1 and good 2, has a utility function u (X1, X2) = x1 0,6. X2 0,4,…
A: Utility maximizing consumption bundle is when MUx1 / MUx2 = p1 / p2, Where MUx1 = Marginal utility…
Q: Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is…
A: A consumer's utility level is graphically represented by concave curves known as indifference…
Q: Consider a consumer whose preferences are given by the utility function U (x, y) = (x + 1)² (y +…
A:
Q: If we consume an additional unit of goods when utility is maximum, the utility we get from this…
A: Utility refers to satisfaction of consumers that they can get by consuming goods and services.…
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: Suppose Natasha consumes two goods: good 1 and good 2. Last year, the price of good 1 was $2.00 and…
A: Laspeyres cost of living index = ∑(p1q0)/∑(p0q0) x 100 Where p1 is current year price p0 is base…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- An agent has income m that can be spent on frequent flier miles f or on other goods – a “composite good” g. Their respective prices are: pf = 10 per mile and pg = 1 per unit. The flier miles have a stepwise price schedule. After the first 25 miles the price is reduced by 20% and after 50 miles the price is further reduced by another 50%.1. Put g on the vertical axis and f on the horizontal axis. Assume m = 200, and draw the budget constraint with all the intercepts and appropriate slopes. 2. On a separate graph, repeat part (1) for m = 300. 3. On a separate graph, repeat part (1) for m = 600.The marginal utility of the last unit of apples consumed is 12, and the marginal utility of the last unit of bananas consumed is 9. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium? Multiple Choice $3 and $4 $4 and $3 $9 and $12 $15 and $10A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in particular: a 2001 French Bordeaux (xf) at $40 per bottle and a less expensive 2005 California varietal wine (xc) priced at $8. If her utility is U(xf, xc) = xf2/3xc1/3, then how much of each wine should she purchase?
- Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrUK, a UK construction company. The manager of Brit-Brick has asked the research department to find out how sensitive ConstrUK’s demand for bricks is. The research department has estimated that ConstrUK’s preferences over bricks (x) and cement (y) can be described by the utility function please see the picture attached, and b=7 The price for one bag of cement is equal to £1. It is estimated that ConstrUK’s budget is £10,000. Find the price-consumption curve for bricks and the corresponding demand curve.Mylie’s total utility from singing the same song over and over is 50 utils after one repetition, 90 utils after two repetitions, 70 utils after three repetitions, 20 utils after four repetitions, −50 utils after five repetitions, and −200 utils after six repetitions. Write down her marginal utility for each repetition. Once Mylie’s total utility begins to decrease, does each additional singing of the song hurt more than the previous one or less than the previous one?Teachers at the local school have contacted the company We R' Write with a complaint. Teachers noticed that when We R' Write sold individual pencils, students made sure to take care of the pencils. However, when the company started selling larger packages of pencils, students started needlessly breaking their pencils, using them for purposes other than doing school work, or even just throwing them away. You have been provided with information regarding the quantity and total utility gained from students purchasing different numbers of pencils that is presented in Table 1 below. Table 2 provides information concerning pens, which will be used to answer the question in the third bullet below. Explain the law of diminishing marginal utility from the standpoint of economic theory as it applies to the situation described in the scenario. Explain what specifically We R' Write should understand about marginal utility as the quantity consumed increases that would explain why students…
- Ice cream and cakes are perfect substitutes for a child, and 2 units of ice cream is always worth 3 units of cakes (however many ice creams or cakes she might have, she would be willing to give up 2 ice creams to get 3 more cakes to keep the same utility level) . (a) Write down a utility function u(x,y) that represents the child's preferences, where x is the number of ice creams and y is the number of cakes she has. (b) If the prices are px= 8 and py =5, and she has $140 to spend on the two goods this summer, what is her optimal bundle? (c) If the price of ice creams decreases slightly, down to px = 7, what happens to her optimal bundle in this case? Did it change "slightly" compared to (b)?Suppose Hannah spends $3 to buy five biscuits. The marginal utility of the fifth biscuit is valued at $0.60. The total utility derived from five biscuits is valued at $4.20. Hannah’s consumer surplus is valued at _____ Group of answer choices $5.00. $1.20. $2.40. $20.00. $15.00.A young consumer has to decide how to spend his spare time. He can either watch movies x or play online video games y. Each round of the game cost 20 and each movie cost 20. He has 200 dollars to spend each week. In addition, he has time constraint. He can spend no more than 20 hours for entertainment each week. A movie last 2 hours and playing a game takes about 1 hour. His utility is given by √xy. Use the Kuhn-Tucker condition to find his optimal choice. (Assume that x and y can take any value, not necessarily integers.) Does the solution satisfy the necessary and sufficient condition for a maximum?
- The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is 20 then the marginal utility of good "b" must be ________ to have an optimum combination of goods purchased. 80 20 60 4Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrUK, a UK construction company. The manager of Brit-Brick has asked the research department to find out how sensitive ConstrUK’s demand for bricks is. The research department has estimated that ConstrUK’s preferences over bricks (x) and cement (y) can be described by the utility function U(x,y) = x2/10y1-2/10 The price for one bag of cement is equal to £1. It is estimated that ConstrUK’s budget is £10,000. Find the price-consumption curve for bricks and the corresponding demand curve.Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrUK, a UK construction company. The manager of Brit-Brick has asked the research department to find out how sensitive ConstrUK’s demand for bricks is. The research department has estimated that ConstrUK’s preferences over bricks (x) and cement (y) can be described by the utility function U(x,y)=xb/10y1-b/10 where b is 2, and where x and y are measured in bags. Example: if b=4, then . U(x,y)=x4/10y1-4/10=x2/5y3/5 The price for one bag of cement is equal to £1. It is estimated that ConstrUK’s budget is £10,000. Find the price-consumption curve for bricks and the corresponding demand curve.
