Doreen has preferences represented by the utility function U(x, y) = 23x + Sy. She consumes 10 units of good x and 9 units of good y. If her consumption of good x is lowered to 1, how many units of y must she have in order to be exactly as well off as before? a. 225 b. 200 c. 250 d. 180 e. None of the above

Doreen has preferences represented by the utility function U(x, y) = 23x + Sy. She consumes 10 units of good x and 9 units of good y. If her consumption of good x is lowered to 1, how many units of y must she have in order to be exactly as well off as before? a. 225 b. 200 c. 250 d. 180 e. None of the above

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.11P

See similar textbooks

Similar questions

Lara has preferences represented by the utility function U(x, y)  2x  2y. She consumes 10 units of good x and 6 units of good y. If her consumption of good x is lowered to 4, how many units of y must she have in order to be exactly as well off as before? The answer is 12 not sure how to get it
I. A)MRS=1/3, B)MRS=1/4, C)MRS=4/3, D)MRS=12 II. A)Rhea should buy more bread, less milk, B)Rhea should buy more milk, less bread, C) Rhea maximizes her utility at bundle A, so she should not change her consumptions of either good, D) Rhea cannot afford bundle A, so she should buy less of both goods III. A)Rhea's MRS at bundle A is greater than the price ratio (Pb/Pm), B)Changing her bundle moves Rhea to a higher indifference curve, C)The slope of the indifference curve (where bundle A is found) is not equal to the slope of Rhea's budget constraint, D)All of the above statements explain your answer to part II.
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.
A maximizing consumer with preferences given by u = x^2+ y^2 allocates 60 dollars of income at pY= 3 and pX= 4. Provide an indifference curve and budget line diagram to illustrate and quantify her utility-maximizing choice a Bundle A. Next month the price of good x will fall to pX= 2. Update your diagram to show the Hicksian compensating and equivalent variations for this price change as Bundles B, C, and D.
Romania has preferences represented by the utility function U(x, y) 2x and 2y. She consumes 10 units of good x and 6 units of good y. If her consumption of good x is lowered to 4, how many units of y must she have in order to be exactly as well off as before? The answer is 12 not sure how to get it
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.
Juliana gets the following 15 units for free if she buys 30 units of good Y (at RM2 per unit). This promotion is only valid for the first 30 pieces she purchases. Calculate Julia's total utility received. Derive Juliana's new budget line equation. Sketch the budget line before and after the change in the price of good Y using an appropriate diagram.
A consumer consumes two goods and her utility is form by Cobb-Douglas utility function. Her MRS is 0.9 * (q2/q1) Using these information find Marginal utility levels of first amd second goods
An agent has utility u(x1, x2) = (x-11+x-12)-1for goods x1 and x2. The prices of the goods are p1 and p2. The agent has income m. a) Show preferences are convex. You can do this graphically or by showing that MRS is decreasing in x1. b) Solve for the agent’s optimal choice of (x1, x2). c) Show the agent’s indirect utility function is given by:V=m(p1/21 + p1/22)2
Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should: a. Reallocate spending from magazines to newspapers. b. Reallocate spending from newspapers to magazines. c. Be satisfied because he is already maximizing his total utility. d. None of the above
Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products G and H. Units of G MUG Units of H MUH 1 36 1 70 2 33 2 60 3 27 3 55 4 21 4 45 5 18 5 30 6 12 6 25 7 6 7 15 If the consumer has a budget of $29 and the prices of G and H are $3 and $5, respectively, the consumer will maximize their utility by purchasing Multiple Choice 3 units of G and 4 units of H. 4 units of G and 2 units of H. 1 units of G and 5 units of H. 2 units of G and 5 units of H.
A consumer has a perfect complements utility function, where she prefers to have one unit of H with each unit of G. Also, she has an income of $210. Assume that the price of H is $8 and the price of G is $6. What is the consumer's optimal choice for good G*? Group of answer choices 11 12 15 16