Given the utility function of a consumer for the goods x and y, U = (x + 2)(y + 1) and the prices of goods are P = 4 TL and Py = 6 TL while the consumer's budget is B= 130TL (Note: There are 5 questions in the test regarding the information given above) If budget increases for 1 unit (B = 131 TL) how much units optimum utility level change? Lütfen birini seçin: O a. Optimum utility level decreases for 3 units. O b. Optimum utility level increases for 1 unit. O c. Optimum utility level decreases for 1 unit. O d. Optimum utility level increases for 3 units.

Given the utility function of a consumer for the goods x and y, U = (x + 2)(y + 1) and the prices of goods are P = 4 TL and Py = 6 TL while the consumer's budget is B= 130TL (Note: There are 5 questions in the test regarding the information given above) If budget increases for 1 unit (B = 131 TL) how much units optimum utility level change? Lütfen birini seçin: O a. Optimum utility level decreases for 3 units. O b. Optimum utility level increases for 1 unit. O c. Optimum utility level decreases for 1 unit. O d. Optimum utility level increases for 3 units.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 11SQ

See similar textbooks

Similar questions

A consumer utility function is U=(x1,x2) Where X1 is the quantity of good 1 that is bought, X2 is the quantity of good 2 that is bought. The price of good 1 is $10 and the price for good 2 is $2. If the consumer's income is $100 what will the consumer's optimal utility level be? b. Using Lagrange multilplier method. optimise the utility function x0.25 y0.25 subject to the budget constraint 24=x/10+y
Which of the FF. statements is correct regarding the preference of the consumers when the income of the consumer can only be spent between apples and oranges? Assume that apples are written on the vertical axis while oranges are written on the horizontal axis A. when the consumer has few oranges, he is willing to trade more apple to get another orange B. when the consumer has so many oranges already, he will only exchange less apples for an orange C. the declining slope of the indifference curve shows the marginal value of oranges is declining D. all are correct E. none is correct
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 budget of $3000 in a given period, and wishes to buy two goods, X and Y, so as to maximise his utility. The price of good X is $5 and the price of good Y is $2, and his MRS is given by the formula 2Y/X. How many units of good X will he buy in that period?
Albion is a company that produces bricks and cement in the UK. Their largest consumer is ConstrUK, a UK construction company. The manager of Albion 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 where b =4. 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.
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.
Utility Function: U(X,Y)=X1/2Y1/2 Budget Constraint: 2X+2Y=16 If the price of good X changes to Px=3, what is the Equivalent variation?
If the marginal utility of the burger is greater than the price of the burger, we expect a rational consumer_______. Group of answer choices to spend more money on pizza. to purchase more burgers. to spend more money on beverages. to purchase less burgers.
Suppose the utility function for a consumer is given by U = X + Y, where X and Y are a consumer's consumption of goods X and Y. Which of the following bundles does this consumer find indifferent between 10 units of X and 5 units of Y? You Answered a. 4 units of X, 10 units of Y b. 2 units of X, 13 units of Y c. 5 units of X, 7 units of Y d. 8 units of X, 8 units of Y
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)?
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?
Suppose a consumer’s preferences can be represented by the utility function U(X,Y) = Min (2X,Y). Also, suppose the consumer has $300 to spend and the price of Good X is PX = $2 and the price of Good Y is PY = $5. If the consumer maximizes their utility subject to their budget constraint, how much of Good X and how much of Good Y will the consumer purchase? X* = Y* =.