If the MU per dollar spent on product A is greater than on product B, then a rational consumer should consume more of product B to compensate. Select one: O True O False
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- Given: U(x,y) = x0.25 y0.75 MUx=0.25 x-0.75 y0.75 MUy = 0.75 x0.25 y-0.25 Px=2 Py=12 a)Find the minimum cost to reach a utility of 1,189. b)Now assume that Px increases to 4 and find the new minimum cost. c) What is the savings from substitution in part b)? d) From the part a) outcome, what lower Py would allow a utility of 2,000?Consider a demand curve given by Q D = 60-13p. What is the consumer's total benefit when he/she consumes 10 units? (round only your final answer to one decimal place if necessary)Let MUA = z = 10 − x and MUB = z = 21 − 2y, where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and B—that is, x + y = 10. How is the $10 best allocated between A and B? How much utility will the marginal dollar yield?
- A consumer has utility u(x,y,z)= ln(x) + 2ln(y) + 3ln(z) over the three goods, x,y and z and pZ = 1 . Optimally sheconsumes 30 units of z. What is her income? How much money does she spend on x?(HINT: MUX =??, MUY =??, MUZ =??and remember the “equivalent bang for the buck” condition)(b) Forget about (a). Suppose you have t = 29 hours in total to spend on 3 projects X, Y and Z to make some money.If you spend x hours on project X, you make 2√? dollars;If you spend y hours on project Y, you make ?√? dollars;If you spend z hours on project Z, you make ?√? dollars;Writing down your “utility function” u(x,y,z) and the constraint, solve the utility maximization problem; what isthe optimal amount of time to spend on x ? on y? on z ?Q1: The demand for good X is given by Qx d = 6,000 − 1/2 Px − Py + 9 Pz + 1/10 M. Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $80,000. a. How many units of good X will be purchased when Px = $5,230? The calculation should be handwrittenhe cost of ingredients for a turkey sandwich at The Pit Room is $5, and the daily demand function for this sandwich is d(p) =1200 - 100p. What price should the seller charge to maximize its daily total contribution? Round your final answer to two decimal places.
- You have k20per week to spend and two possible uses for this money,:telephoning friends back home and drinking coffee. Each hour of phoning costs k2 and each cup of coffee costs k1. Your utility functions U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink. How much income per week will enable you to achieve the same quantities at the new process the ones you chose before? What income will enable you to attain the same utility as you did before.? Comment on your answer in the context of equivalent variation and compensation variationMalita has K150 of disposable income to spend each week and cannot borrow money. She buys Milk balls and a composite good. Suppose that Milk balls cost K2.50 per bag and the composite good costs K1 per unit. a) Sketch Malita’s budget constraint. b) What is the opportunity cost, in terms of bags of Milk balls, of an additional unit of the composite good? c) Suppose that in an inflationary period the cost of the composite good increases to K1.50 per unit, but the cost of Milk balls remains the same. Sketch the new budget constraint. d) What is the opportunity cost of van additional unit of the composite good? e) Suppose now Malita demands a pay raise to fight the inflation. Her boss submits and raises her salary so that her disposable income is now K225 per week. Sketch the new budget constraint. Is Malita better off? f) What is the opportunity cost of an additional unit of the composite good? Please ANSWER e and f. The K before a number is just the currency abbreviation.ThanksIn economic terminology, a normal good is a good O that is liked only by normal people. O for which demand increases when price increases. O for which demand increases when income increases. on which a monetary value cannot be placed. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
- The demand for pancakes is given by Qd = 40 – 5P and the supply is given byQs = 10P – 20, where P = price What is the equilibrium price and equilibriumquantity? i. The price for iPhones in Barbados has increased significantly. Demand for thecellular device has also increased. This is contrary to the law of demand. Doyou agree or disagree? Explain your answer. ii. Identify the flaw in this analysis: “If more Jamaicans become vegetarians, thedemand for beef will fall. The decrease in the demand for beef will cause theprice of beef to fall. The lower price, however, will then increase the demand.In the new equilibrium, Jamaicans might end up consuming more beef thanthey did initially.”The consumer choice is not restricted to the choice of consumptiongoods. In fact, it can apply to all our decisions that involve trade-offs. Suppose Mary has awage per hour of 10 euros. With her earned income she consumes. That isC=wH per day.She also decides how many hours to work of take leisure time each day.H=24-N, whereHis work and N is leisure. Her utility is given by (picture) Solve for the optimal decision of labor/leisure. Plot the budget constraint and the indif-ferent curve. What is the labor supply function?An individual’s utility function is given by where is the amount of leisure measured in hours per week and is income earned measured in cedis per week. Determine the value of the marginal utilities, when = 138 and = 500. Hence estimate the change in utility if the individual works for an extra hour, which increases earned income by GH¢15 per week. Does the law of diminishing utility hold for this function?