Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…
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A: marginal utility depicts an additional satisfaction attained by the consumer when he consumes one…
Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
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A: At optimal condition MRS = Price ratio.
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Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
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Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…
Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
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A: Budget Line 10.5 = 0.5B + P21 = B + 2P (By duviding 0.5) MU = Change in TU/Change in Q
Q: Ceja has utility function U=A2*B2 , where A equals the number of apples she eats each week, while B…
A: utility function U=A2*B2 where A = Apples and B = Banana Income = $20 Cost of apple = 1 cost of…
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Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Hi, thanks for the question. Since posted multiple questions, we will answer for first question. If…
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Q: Assume that Rossi consumes only bananas and avocado. Fortunately, she likes both goods. The…
A: X1 represents consumption of bananas per week X2 represents consumption of avocado per week.…
Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…
Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…
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Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
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Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
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A: i. u(x,y)=x+y x+4y=100 α=max u(x,y) st x+4y=100α=x+y+λ(100-x-4y)dαdx=12x-λ=012x=λ…
Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…
A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…
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If marlow obtained 9 units of utility per dollar spent on apples and 6 units of utility per dollar spent on oranges, then Marlowe
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- Describe the two approaches of utility analysis !You have the Cobb-Douglas utility function u(x,y) = xy over apples (x) and plums (y) and you have $120 budget to spend and can carry at most 480 ounces in weight in your backpack going back to the dorm. Each apple costs $1 and weighs 8 ounces, and each plum costs $3 and weighs 4 ounces. You can only leave the store with a bundle of fruits you can afford and carry. (a) Drawing the relevant lines, intercepts, marking the points and hence identifying the feasible set of bundles, calculate the optimal bundle. (b) Forget about (a). If you were to choose a backpack before going on this shopping trip, for the weight constraint not to be an issue for you, how many ounces of weight capacity would you need for your backpack? HINT: That is, for this weight capacity of the backpack, you’d be able to carry the best bundle you can afford, i.e, the weight constraint is not binding for your decision. ( c) Forget about (b). In (a), just before going out for shopping with your backpack to buy the…Ceja has utility function U=A2*B2 , where A equals the number of apples she eats each week, while B is the number of bananas she eats each week. Ceja has $20 to spend on fruit each week. The price of an apple is $1, while the price of a banana is $0.25. Find out the combination of Apples and Bananas that maximize Ceja’s satisfaction. If price of Banana is increased by $.25, what will be the new combination of A and B that would maximize her utility? Show graphically and drive the demand curve for Bananas
- John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke or does he show increasing marginal utility for Coke? Suppose that John has $3 in his pocket. If Cokes cost $1 each and John is willing to spend one of his dollars on purchasing a first can of Coke, would he spend his second dollar on a Coke, too? What about the third dollar? If John’s marginal utility for Coke keeps on increasing no matter how many Cokes he drinks, would it be fair to say that he is addicted to Coke? *use tables and/or graphs if possible, please original workSuppose that each week Fiona buys 16 peaches and 4 apples at her local farmer's market. Both kinds of fruit cost $1 each. From this we can infer that: If Fiona is maximizing her utility, then her marginal utility from the 16th peach she buys must be greater than her marginal utility from the 4th apple she buys. Fiona is not maximizing her utility. If Fiona is maximizing her utility, then her marginal utility from the 16th peach she buys must be equal to her marginal utility from the 4th apple she buys. The law of diminishing marginal utility does not hold for Fiona.Reese thinks peanut butter and chocolate are great when separate, but when they combine they are even more epic. In other words, Reese likes to eat either peanut butter or chocolate, but when he eats them together, he gets additional satisfaction from the combination. His preference over peanut butter (x) and chocolate (y) is represented by the utility function: u(x, y) = xy + x + y Suppose that now Reese loses almost his entire income, so that he is left with only one dollar, i.e. his new income is I0 = 1. If prices are still px = 2, py = 4, what is his new optimal consumption of x and y (Hint: Remember that consumption of both goods must be weakly positive, i.e. x∗ ≥ 0 and y∗ ≥ 0) (a) x∗ = 0.5, y∗ = 0(b) x∗ = 0.25, y∗ = 0(c) x∗ = 0.75, y∗ = 0.25(d) x∗ = 0.75, y∗ = 0(e) x∗ = 0.5, y∗ = 1
- First household m=$2,500 per month, spends $125 dollars per month on electricity. Second household m=$10,000 per month and spends $200 per month on electricity. p1=0.1 and p2=1 x1=consumption of electricity and x2=everything else The preferences over electricity and other goods is described by a Cobb- Douglas utility function. What are the parameters of the utility function for each of the two households?Suppose that at current consumption levels an individual's marginal utility of consuming an extra sandwich is 10 whereas the marginal utility of consuming an extra coffee is 2. Then the MRS (of coffee for sandwiches) that is, the number of sandwiches the individual is willing to give up to get one more coffee is a 5 b. 2 C.1/2 d. 1/5The table below shows Martha’s total utility from burgers and pasta. Suppose that the price of a burger is $4, the price of pasta is $8 a dish, and Martha has $24 a week to spend. Quantity of Burger per week Total utility for Burger MU MU/P Quantity of Dishes Pasta per week Total utility for Pasta MU MU/P 0 0 0 0 1 10 1 20 2 18 2 36 3 25 3 48 4 31 4 56 5 36 5 60 6 40 6 62 a- Conclude whether or not we follow the law of diminishing MU. b- What is optimal combination of Burger and Pasta?
- Julio loves gardening. His favourite plants are tulips and hydrangeas. His utility function is ' u(t,h)= t +100h -h^2 where t is the number of tulipsin his garden and h is the number of hydrangeas in his garden. suppose he has a 500 square feet for his garden. each tulip takes up 1 square foot of space and each hydrangeas takes up 4 square feet. he gets both plants for free.If he wanted to maximize his utility, how many tulips should he plant, what about hydrangeas? b) if his yard was only 144 square feet, how many tulips would he plant? How many hydrangeas? C) In order to plant both tulips and hydrangeas, how big does his garden need to be. carfeully explain.Heather and Jeremiah both enjoy sunflower butter (s) and jelly (j) sandwiches, but they have varying preferences regarding the optimal ratio of the two. Heather prefers her sandwiches to have 6 spoonfuls of sunflower butter for every 3 scoops of jelly, whereas Jeremiah prefers 3 scoops of sunflower butter for every 5 scoops of jelly. They both would prefer as many sandwiches as possible, but derive no utility from sandwiches without their preferred ratio of s and j. A) Write down a utility function for both Heather and Jeremiah regarding consumption of s and j (U(s,j)) B) On the same graph, draw a set of indifference curves for both Heather and Jeremiah, labeling which is which. C) In addition to s and j, Heather and Jeremiah now need bread, b, to make sandwiches. Heather prefers to separate her sunflower butter and jelly and therefore uses 3 slices of bread per sandwich. Write down Heather’s utility function Uh(s,j,b) as a function of the three inputs.Megan is a college student who consumes food and transportation. Last year, she consumed 90 meals and purchased 100 gallons of gasoline per month. Suppose that last year the price of a meal was $5 and the price of a gallon of gasoline was $2.23. However, this year, the price of a meal is $6 and the price of a gallon of gasoline is $3.92. As a result, Megan consumes 100 meals and 80 gallons of gasoline. For this example, assume Megan's utility this year is the same as her utility last year (and that her preferences have not changed). Calculate a Laspeyres cost-of-living index for Megan using 100 as the base for last year. In particular, the Laspeyres index for this year is nothing. (Enter your response rounded to two decimal places.)
