Let x be eggs and y be bagels. An individual utility function is given by U(x, y) = ½ x + 1 y. This individual budget constraint is 4 = 2 x + 1 y.  At the point at which this individual maximizes her utility level she buys how many unit(s) of x and how many unit(s) of y?

Q: Total utility is 0 when marginal utility is 0 True/False

A: # Utility is a concept which helps us calculate the satisfaction a consumer gets when a good or…

Q: Assuming the two good case.  When a person is attempting to maximize utility and the price of one of…

A: A budget constraint is  combination of two goods which are available for the consumer at market…

Q: Suppose a consumer’s preferences can be represented by the utility function U(X,Y) = Min (2X,Y).…

A: Utility function: U = Min (2X, Y) --------------------- Budget constraint: Price of good X (Px) = $2…

Q: Why does the optimal consumption bundle occur where the budget line is tangent to the indifference…

A: Answer: Introduction: A consumer maximizes his/her consumption where the slope of the budget line is…

Q: We claimed in the text that if preferences were monotonic, then a diagonal line through the origin…

A: Indifference curve refers to the graphical representation of various combinations of two goods,…

Q: You run a foundation that provides help to families during the holiday season. You distribute both…

A: Budget line shows various combination of 2 goods that a person can buy, given the prices of the…

Q: A well-behaved utility function is assumed to exhibit monotonic and convex preferences. (1) Define…

A: lets solve part 1 and part 2 in the following steps

Q: An indifference curve is the locus of points of combination of goods which gives equal satisfaction…

A: Consumers Equilibrium: Consumer equilibrium is the situation of maximum satisfaction. When the…

Q: Hector has a budget for bottled water and soda pop. If the price of soda pop decreases, Hector will…

A: Indifference curve shows the combination of two goods which give a consumer same level of…

Q: If BC2 is the relevant budget constraint, then the consumer will purchase bundle

A: Budget constraint represents all the combination of goods which the consumer can purchase with his…

Q: The consumer is in equilibrium at a point where the budget line

A: Consumers are balanced at the intersection of the budget lines.

Q: Sophia’s preferences over donuts (D) and coffee (C) are represented by the utility function:…

A: The utility function implies donuts and coffee are perfect complements and consumed in fixed…

Q: Consider the consumer whose tastes and preferences for (X) and (Y) can be characterized by the…

A: The utility function can be written as follows: The budget constraint can be written as follows:

Q: A consumer’s preferences over consumption bundles (x1,x2) are strictly monotonic and strictly…

A: Consumer preferences are characterized as the abstract (individual) tastes, as estimated by utility,…

Q: Consider a person whose tastes and preferences are represented by IC . Something changes his tastes…

A:

Q: ) = N 's“, where 0 0. The price of jam is pj, the price of sandwiches is Ps, and Joey monthly…

A:

Q: Suppose now we want to minimize our expenditure while achieving a certain amount of utility. So say…

A:

Q: If a rational consumer is in equilibrium, then: a. the marginal utility obtained from one product is…

A: A rational consumer is in equilibrium when he maximizes his utility subject to his budget.

Q: The Busto family is allocating its monthly household expenditure between only two goods, food and…

A: Given information: Price of food: $5 per unit Price of clothing: $10 per unit Marginal utility from…

Q: What does revealed preference theory based on? a) Utility and demand b) Observed consumer behavior…

A: Revealed preference: Revealed preference is a theory relating to somebody's consumption patterns,…

Q: Q1. Bob has a utility function defined over goods 1 and 2: u(x1; x2) = min{6*x1 + x2, x1 + 2*x2}…

A: u(x1; x2) = min{6*x1 + x2, x1 + 2*x2}

Q: A consumer is in equilibrium and is spending income in such a way that the marginal utility of…

A: Here,

Q: True or False? The preferences represented by the utility function u(x, y) = A + 0.4 * log(x) + 0.6…

A: In economics, utility refers to the pleasure or happiness that consumers derive from using a product…

Q: Which of the following statements is true? OThe budget line shows the utility associated with all…

A: The budget line shows all the affordable consumption bundles so the first statement is incorrect.…

Q: Suppose a consumer has a budget of $200 to spend on two goods, X and Y, whose prices are $20 and…

A: Answer: Given, Total budget = $200 Price of good X PX=$20Price of good Y PY=$10 (d). A consumer is…

Q: Suppose marginal utility of good X is 20 while its price is Rs. 4 per unit and marginal utility of Y…

A: (Q) Suppose the marginal utility of good X is 20 while its price is Rs. 4 per unit and the marginal…

Q: Consider an agent whose preferences over any couple (r1, 22), where r1 E R4 and r2 E R+, e.g.,…

A: Answer -

Q: Draw an individual choice diagram for a person choosing between buying apples or bananas with a…

A: Answer: A person maximizes his/her utility where the budget line and indifference curves are tangent…

Q: Praxilla who lived in ancient Greece derives utility from Reading poems and from eating cucumbers.…

A: Marginal utility (MU)  is the additional gain that is derived by consuming an additional unit of a…

Q: The marginal rate of transformation of y for x represents *         a)the rate at which the consumer…

A: The marginal rate of substitution refers to the rate at which a consumer gives up a good to get an…

Q: Suppose that you have two consumption choices: good X, and good Y. An indifference curve is the set…

A: Indifference curve show the relationship between consumption of two goods and service , consume by…

Q: T/F Explain If preference is strongly convex, the utility function will exhibit dimin- ishing…

A: The satisfaction or benefit acquired from consuming a product is referred to as utility;…

Q: Which of the following statements is true? a. An indifference curve represents combinations of…

A: An indifference curve basically refers to a graphical depiction of a combination of two items that…

Q: Suppose that a typical consumer’s utility function is characterized by the following relation…

A: According to question resource available to the consumer is 160 birr . Taking birr as the currency…

Q: For the consumer whose choices are shown in the diagram, the substitution effect of the price change…

A: Substitution effect is change in demand or consumption of  a commodity or a service due to a change…

Q: Give a real-life example (from your daily life) that illustrates total utility rising as marginal…

A: Total utility(TU) is the satisfaction or benefit derived from consuming a good. Marginal utility(MU)…

Q: Another instance when people are likely not to spend a dime (or a minute) on an item is when they…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Check if the following utility functions represent the same preferences: u = x+y, v = x3 + y3, w =…

A:

Q: Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris…

A: A well-behaved consumer means the preference relation is convex and monotonic in nature

Q: If the slope of the indifference curve between goods X and Y is steeper than the slope of the budget…

A: The indifference curve shows a combination of two goods that gives an equal level of satisfaction…

Q: Suppose there are 2 commodities ( good x and good y( and the consumer faces the following prices,…

A: In consideration of the bundle of 10 units of x and 0 unit of y, total cost will be $10 ( = $1*10 +…

Q: Individuals who buy second homes usually spend less for them than they do for their first homes. Why…

A: Law of diminishing marginal utility- As per this law as there is a rise in the consumption of…

Q: Using the concept of a numeraire, set out a budget line for good X1 and X2 representing all other…

A: Answer: Given, There are two goods i.e. good X1 and X2 that represent all other goods. Monthly…

Q: True or false.  A change in prices or income can alter preferences and thus the indifference curves…

A: In the mentioned question, we are asked whether there is any shift seen in the indifference curve…

Q: marginal rate of substitution (MRS) can be defined as: Select one or more: a. The amount of one…

A: Marginal rate of substitution depicts the relative price of two goods.