Given the Utility Function is U = X0.7Y0.3 and Budget is taka 300. The original price was (Px, Py) = (2, 2) and the new price is (Px’, Py) = (4, 2). (a) Draw an angle curve for X by using the above information [Labelling is must] (b) Calculate the value of Compensation variation (CV) and Equivalent variation (EV)?
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Given the Utility Function is U = X0.7Y0.3 and Budget is taka 300. The original price was
(Px, Py) = (2, 2) and the new price is (Px’, Py) = (4, 2).
(a) Draw an angle curve for X by using the above information [Labelling is must]
(b) Calculate the value of Compensation variation (CV) and Equivalent variation (EV)?
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- Emma has a utility function U(x1, x2, x3) = log x1 + 0.8 log x2 + 0.72 log x3 over her incomes x1, x2, x3 in the next three years. This is an example of (A) expected value; (B) quasi-hyperbolic utility function; (C) standard discounted utility; (D) none of the above. Emma’s preferences can exhibit which of the following behavioral patterns? (A) preference for flflexibility; (B) context effffects; (C) time inconsistency; (D) intransitivity.Emma has a utility functionU(x1, x2, x3) = logx1+ 0.8logx2+ 0.72logx3 incomes x1 , x2, x3 in the next three years. This is an example of (A) expected value; (B) quasi-hyperbolic utility function; (C) standard discounted utility; (D) none of the above.Select the correct option : When the expected utility of offer A is larger than offer B, a rational individual would always prefer offer A to offer B. 1. True 2.False
- Consider two treatments. Treatment 1 saves one year of life at a cost of $10,000. Treatment 2 saves ten years of life at a cost of $1,000,000. Which treatment is more cost-effective? Why? Consider two treatments. Treatment 1 saves six years of quality adjusted life at a cost of $90,000. Treatment 2 saves three years of quality adjusted life at a cost of $60,000. Which treatment is preferred from a cost utility analysis perspective? Suppose Jay has been experiencing back pain and that there are two options for back pain: Treatment Regimen Total Cost Pain Reduction Do nothing $0 0 units Cortisone injections $600 30 units Calculate the ICER between cortisone injections and doing nothing. Jay says he is willing to pay $10 for a per unit of pain reduction. Should he choose cortisone injections? Another treatment is discovered. It costs $700 and reduces pain by 25 units. Should he choose the new treatment?Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30). Their indifference curves are given in the graph below. a.) To get the highest utility consistent with their budget, this person will buy ____ pairs of shoes and _____ concert tickets. b.) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Which of the following statements is true? Select one or more options: a-If two different individuals have exactly the same budget constraint but different preferences (different appearance of the indifference curves) then they will have different equilibrium conditions for optimal choice b-The marginal substitution ratio is always equal to 1 for perfect substitutes c-If item X costs SEK 10, item Y costs SEK 20 and if the marginal benefit for X is 20 and the marginal benefit for Y is 30, then the individual should buy more of Y and less of X d-In the case of a corner solution for an individual, the marginal substitution ratio for two goods is not equal to the relative price of the two goods
- It is given that a typical consumer has a well-behaved preference structure for his consumption bundle, which includes only two goods, A and B. Further, assume that commodity A is normal and commodity B is Giffen. By keeping commodity A on the x-axis and commodity B on the y-axis, you are required to show the price decomposition for commodity B when $PB decreases exogenously relative to $PA.Lower indifference curve represents higher level of satisfaction True/FalseMarina decides to purchase a ring made from an alloy composed exclusively of gold (G) and titanium (T). The price of gold is $60 per gram, and the price of titanium is $30 per gram. Her total budget for the ring is $600. Her utility function is given by U(G,T) =GT. Suppose the price of titanium falls to $20 per gram. At the final basket, the optimal amount of titanium is（）grams.
- If total utility increases as wealth increases, the first derivative of the utility function is negative. TRUE OR FALSETrue/False Utility refers to the total satisfaction or happiness that an individual get from consuming a product.Suppose the consumer solves the following UMP: max (x1)^2 + (x2)^2 , s.t. p1x1 + p2x2 ≤ w where p1,p2 > 0. a) Plot the indifference curves b) Find the Marshallian demand functions. Show graphically the utility maximizing choices.