Maximize utility u = Q1 Q2 + Q1 +2Q2, subject to P₁ = 2, P₂ = 5 and B = 51 where; u = utility; Q₁ = good Q₁ Q2 = good Q2 P₁ = price of Good Q₁ P2 = price of Good Q₂
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1. What will be the maximing level of Q1?
2. What will be the maximing level of Q2?
3. What is the result of the computed λ ?
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- 44) A person is in equilibrium when marginal utility per dollar equals 1. False True 45) The budget line for large-ticket items will be affected by the prices of the two items, the income level, and the interest rates for borrowers. True False 46) Which statement is NOT a critique of utility theory? Not all decisions are made rationally. Utility is not measurable. Utility theory is limited to an analysis of individual demand behavior. People do not make mental calculations of satisfaction.Which among the following is true? Select one: a. None of the answers are correct b. Marginal utility of cash gift is same as of the noncash gift c. Cash gifts add relatively more to total utility of recipient than noncash gifts d. Both cash and noncash gifts add same to the total utility of recipient e. Noncash gifts add relatively more to total utility of recipient than non cash giftsTrue/False Utility refers to the total satisfaction or happiness that an individual get from consuming a product.
- Suppose a person is endowed with Bundle A and the price of X is $10 and the price of Y is $1 on the blue budget line. Group of answer choices If he sells all the good X he is endowed with, he will move from Bundle A to E. If he sells all the good X he is endowed with, he will move from Bundle A to C. If he sells all the good X he is endowed with, he will move from Bundle A to B. If he sells all the good X he is endowed with, he will move from Bundle A to D.Indicate whether the statement is true or false, and justify your answer.There is a massive body of evidence that humans prefer a fixed amount of utility now to that same amount of utility later.Which of the following statements is true? Select one or more options: a-If two different individuals have exactly the same budget constraint but different preferences (different appearance of the indifference curves) then they will have different equilibrium conditions for optimal choice b-The marginal substitution ratio is always equal to 1 for perfect substitutes c-If item X costs SEK 10, item Y costs SEK 20 and if the marginal benefit for X is 20 and the marginal benefit for Y is 30, then the individual should buy more of Y and less of X d-In the case of a corner solution for an individual, the marginal substitution ratio for two goods is not equal to the relative price of the two goods
- Question 14: Market pressures continually swing back and forth, driving towards a particular price where the quantity supplied equals the quantity demanded. This point is called A Maximum Supply B Minimum demand C Optimal Utility D Price EquilibriumEconomics If a consumer has a utility function of U = x + 2y, which statement is true? The MRSy→x = -1/2; x and y are perfect substitutes The MRSy→x = -2; x and y are perfect substitutes The MRSy→x = -1/2; x and y are perfect complements The MRSy→x = -1; x and y are perfect substitutes None of the above.Suppose the price of good X decreases. The new consumer equilibrium level of good X will be: higher than before the price change. lower than before the price change. indeterminate without more information. the same as before the price change.
- 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.A consumer has the indifference map shown below. The market prices of X and Y are $20 and $12, respectively. The consumer has $1,000 to spend on goods X and Y. The utility-maximizing bundle is Multiple Choice 40 units of good X and 10 units of good Y. 10 units of good X and 40 units of good Y. 20 units of good X and 18 units of good Y. 50 units of good X and 0 units of good Y. None of the choices are correct.Which of the following statements is true? Select one or more options: -If two different individuals have exactly the same budget constraint but different preferences (different appearance of the indifference curves) then they will have different equilibrium conditions for optimal choice -The marginal substitution ratio is always equal to 1 for perfect substitutes -If item X costs SEK 10, item Y costs SEK 20 and if the marginal benefit for X is 20 and the marginal benefit for Y is 30, then the individual should buy more of Y and less of X -In the case of a corner solution for an individual, the marginal substitution ratio for two goods is not equal to the relative price of the two goods
