iven Katy's utility function, she needs to give up increasing o visit one more party and remain as well off. O True O False O Unable to be determined
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- Pareto eliminated psychology from economics:a. by defining utility as ordinal, not cardinal utilityb. searching for secondary qualities of thingsc. defined rationality as consumer behavior only after they have bought something several timesd. by accepting revealed preference.Eren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).T/F Explain Utility numbers cannot be negative since higher utility means a con- sumer is better off.
- Roxanne is considering chipping in to pay for some tree trimming in her neighborhood. If the trees are trimmed, everyone's view improves by the same amount. Roxanne's utility function is given by u(x,t)=3x+1200t, where x is the amount of money she has to spend and t is a variable that equals 1 if the trees are trimmed and 0 if they are not. 1st attempt See Hint Suppose Roxanne starts with $8000. Her utility of that amount of money without the trees being trimmed is 24000 (that is, u(8000,0)=24000). Calculate her reservation price for contributing to the tree-trimming project. $No written by hand solution Assume Fred has the following preference relation on [0, 1]: x ≿ y if and only if x ≤ y for all x ̸= 1 and y ̸= 1; and 1 ≻ z for all z ∈ (0, 1), 1 ∼ 1 and 0 ≻ 1. Does there exists a utility representation for this preference relation? If yes, provide a utility function. If no, explain. Show your work.During any year, I can consume any amount that doesnot exceed my current wealth. If I consume c dollars duringa year, I earn ca units of happiness. By the beginning of thenext year, the previous year’s ending wealth grows by afactor k.a Formulate a recursion that can be used to maximizetotal utility earned during the next T years. Assume Ioriginally have w0 dollars.b Let ft(w) be the maximum utility earned during years t, t 1, . . . , T, given that I have w dollars at the be-ginning of year t; and ct(w) be the amount that should be consumed during year t to attain ft(w). By workingbackward, show that for appropriately chosen constantsat and bt,ft(w) btwa and ct(w) atwInterpret these results.
- Mylie’s total utility from singing the same song over andover is 50 utils after one repetition, 90 utils after tworepetitions, 70 utils after three repetitions, 20 utils afterfour repetitions, 250 utils after five repetitions, and 2200utils after six repetitions. Write down her marginal utilityfor each repetition. Once Mylie’s total utility beginsto decrease, does each additional singing of the songhurt more than the previous one or less than the previousone?Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).i will 10 upvotes urgent Say Anna's utility function is given by UA = MAMM, where MA is Anna's wealth and MM is Marie's wealth. Initially, Anna has 160 units of wealth and Marie has 40. When Anna maximizes her utility, her utility level is equal to: Multiple Choice 10,000. 5,000. 100. 200.
- Amadea spends all her income on pizza,chocolate milk, and music streams. The price of pizza is $4 per slice and price ofchocolate milk $2 per bottle. At Amadea's current consumption level, her marginalutility for pizza is 50 units per slice and for music 100 units per stream. Assuming thatAmadea is a utility maximizer, how much is (a)her current marginal utility for a bottleof chocolate milk, and (b) the price of streams she buys. Show your work. [Hint: Ch 6:Utility-maximizing formula)Consider an economy composed of 16 consumers. Of these, 5 consumers each own one right shoe and 11 consumers each own one left shoe. Shoes are indivisible. Everyone has the same utility function, which is Min(2R, L}, where R and L are, respectively, the quantities of right and left shoes con sumed. A) (10%) Is the status quo (where each individual has his own shoe) Pareto efficient? If so, briefly explain why. If not, provide a Pareto improvement b) (10%) Characterize all Pareto efficient allocationsSanjay won a poker game against his friends. Now he has to choose between $600 (the winnings) and the chance to play a new game. In this new game, Sanjay has a 50% chance of winning nothing and a 50% chance of winning $1000. The following graph presents the utility function of Sanjay with respect to money: 1. By how much money would his winnings need to increase or decrease so that Sanjay isindifferent between the $600 and the new game? At a different table, Juan wins $800 in a blackjack game. Similarly, he has to choose between $800 or the chance to win a new game. In this game, Juan has a 45% chance of winning nothing and a 55% chance of winning $1000. The following graph presents the utility function of Juan with respect to money: 2. By how much money would his winnings need to increase or decrease so that Juan is indifferent between the $800 and the new game? Please enter a positive number for an increase or a negative number for a decrease.