Euclid, whose income is W, consumes bundles of food (F) and transportation (T). Suppose that Euclid has constant MRSET equal to 3. What is Euclid's demand for food if food is twice as expensive as transportation? O W(pr+2pp)- O W/lpr+pr). O W/pp. O W(2pr+pr). O W/pr.
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- Tom's income is 32. He consumes a single consumption good, C, which has a price of 2. His utility function depends on his marital status: when happily married, his utility is given byU=C^(1/2) When he is not married, his utility is given by U=0.5C^(1/2) a. Suppose that Tom is not currently married. What is his utility? Now suppose that Tom gets married.What is his utility? Assume Tom can spend all his income on his own consumption when he is married. b. Use compensating variation (CV) and equivalent variation (EV) to calculate the value of marriage to Tom. How do the two figures compare?Suppose a consumer has a monthly income of m = 100 which she spendson two commodities: french fries (x1) and beef jerky (x2). The price offrench fries is p1 = 2 and the price of beef jerky is p2 = 5.(a) Write down the consumer’s budget constraint (equation).(b) What is the maximal consumption of french fries (this is calledthe real income in french fries).(c) Find the maximal consumption of beef jerky (real income interms of beef jerky).Katie Kwasi's utility function is U(x₁, x₂)=5(In x₁)+x₂. Given her current income and the current relative prices, she consumes 10 units of x₁ and 15 units of x₂. If her income doubles, while prices stay constant, how many units of x₁ will she consume after the change in income? a)10 b)20 c)15 d)5
- Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are $18, $6, $4, and $24, respectively, and that Ricardo has an income of $105. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? How many dollars will Ricardo choose to save? Check your answers by substituting them into the algebraic statement of the utility‑maximizing rule. In other words, show it works when using this rule.Consider an economy with 100 identical households and 100identical firms. Each household is endowed with one unit of time. Half of the households are endowed with equal shares of firm, while the rest areendowed with no firm shares. A householdís utility is u (x; r) = 2 ln(x*r^2) ,where x is consumption of goods, r = 1- l is leisure time and l is thehouseholdís labour supply. Each firm hires households to produce goodsaccording to technology y = L^1/2, where L denotes the labour input. Goodsprice p, wage rate w, and dividend income are all taken as given. Normalizew = 1. Do the following: (a) Derive the Marshallian demands, x (p, D) andr (p,D), where D is dividend. (b) Derive the firmís input demand functionL (p) and profit function pi(p). (c) List all the market-clearing conditions.(d) Calculate the equilibrium price p
- Ma1. Please give only typed answer. Assume the following expendiexpenditure function. (a) Interpret this function. In particular, what will happen to the optimal expenditure, if the consumer wanted to maintain a high level of utility? (b) Calculate Hicks demand for good 2. (c) Suppose that p1 = 1, p2 = 1 and that U = 28. Calculate and interpret the variation compensation if the price of good 2 increases by $1.brownie has $100 that he can spend on milk and gas. A gallon of milk costs $5.However, government gives its citizens a coupon that entitles people to 20%discount on their first 10 gallon milk purchases. Gas costs $4 per gallon andgovernment charges $1 for each gallon of purchased gas. John’s utility functionis U (x, y) = 9x+10y, where x and y represent gallons of milk and gas consumed,respectively. What is John’s optimal consumption of milk and gas?Question 3 Part bIf government removes the quantity restriction to which the coupon applies (i.e.20% discount is applied to any quantity of milk purchased), what will be John’soptimal consumption?(Short Answers) 1. Jie works in a university. He can work as many hours as he wishes at a wage rate of w. Let C be the number of dollars he has to spend on consumption and let R be the number of hours of leisure that he chooses. Assume that Jie has the utility function U(C, R) = In(C) + In (R). He carms $4 per hour and has 80 hours per week to devote to labor or leisure, and has no income from sources other than labor. a) How many consumptions does he choose? How many hours of leisure does he choose? b) Suppose that Jie's wage rate will rise to $6 per hour from next year. How many hours of leisure per week will he choose next year? You are required to decompose his change in demand into the substitution effect, ordinary income effect and endowment income effect. c) Suppose that Jie will get $4 per hour for the first 35 hours that he works and $6 per hour for every hour beyond 35 hours a week from next year. How many hours of leisure per week will he choose next year?
- ASAP according to helly only needed answer Q. 8. Suppose a consumer can afford to buy 6 units of good 1 and 8 units ofgood 2 if she spends her entire income. The prices of the two goods are ₹ 6 and₹ 8 respectively. How much is the consumer's income ?jamie has $100 that he can spend on milk and gas. A gallon of milk costs $5.However, government gives its citizens a coupon that entitles people to 20%discount on their first 10 gallon milk purchases. Gas costs $4 per gallon andgovernment charges $1 for each gallon of purchased gas. Jamies utility functionis U (x, y) = 9x+10y, where x and y represent gallons of milk and gas consumed,respectively. What is Jamies optimal consumption of milk and gas?Part bIf government removes the quantity restriction to which the coupon applies (i.e.20% discount is applied to any quantity of milk purchased), what will be jamieoptimal consumption?Denote the consumption of food by x and the consumption of all other goods by y. The demand for food as a function of prices and income is given by: Qx(px,py,W)=5W/8px. Suppose that W=100, px=3, and py=5. The change in consumption of food that is caused by a 2% increase in W is approximately: An increase of 2% in demand of y. There is no change. A decrease of 2% in demand of y. A decrease of 2% in demand of x. An increase of 2% in demand of x.
