Mike has two identical brothers. Each of them have the same utility function below. If Mike and his brothers are the only people in the market, what is the aggregate demand at each price of X below? (Each of their income is $100 and the price of Y is always $1). U (x,y) = x^2/5 Y^3/5 Price of X=$8 Price of X=$4 Price of X=$2 Price of X=$1
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Mike has two identical brothers. Each of them have the same utility function below. If Mike and his brothers are the only people in the market, what is the aggregate
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- Consider your preferences for Gasoline (X) and a composite good (Y). Your utility function is U(X,Y) = X^(2/5 )+ Y^(2/5). You have an annual income of $40,000. Suppose the price of the composite good is $1. a) Due to shortages, the government has introduced a rationing system such that you can only consume a maximum of 5,000 liters a year at $1 a liter. What would be your optimal consumption bundle? b) The government removes the rationing system and the free market price of gasoline jumps to $2. What would be your new optimal consumption bundle? Are you better off with or without the rationing? Show by finding the utility levels. c) Illustrate your solution in a clearly labeled graph.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.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
- Reagan spends more time doing research regarding which car she is going to purchase than she does regarding which coffee maker to purchase. This illustrates the consumer choice principle that: the marginal utility derived from coffee is higher than a car. consumers ignore opportunity cost when doing research. consumers make decisions as if they have unlimited resources and income. the time and effort consumers spend in acquiring information is directly related to the potential value derived from the information.In the basic supply-and-demand model, a buyer only purchases a good when? if the price is lower than it was previously. if the price of the good covers the producers’ costs of production. if the price is less than they are willing to pay. if doing so increases the well-being of society. if they are forced to do so.If buyers' preferences change so that they are willing to buy more widgets at each hypothetical price, the of/for widgets will demand, decrease supply, increase supply, decrease. demand, increase.
- Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.” Do you agree or disagree with this view? Explain.Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.”Do you agree or disagree with this view? Disagree - the reduction in demand will push the equilibrium price below its original level. Disagree - this confuses a change in demand with a change in quantity demanded. Agree - the price increase will ultimately leave cigarette consumption unchanged. Disagree - higher cigarette prices will actually increase the demand for cigarettes.Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.” Do you agree or disagree with this view?
- In the graph above, if the maximum price is set at P1, what area(s) represent the deadweight loss as a result of this policy? Question 14 options: a) Areas A+C+G b) Area B c) Areas E+F d) Areas C+D e) Areas B+DWhich 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 goodsCorrupt officials may have an incentive to reduce the provision of government services to help line their own pockets. Suppose that the provincial construction supervisor decides to cut the total number of housing inspectors from 20 to 10 in order to decrease the supply of new housing permits. This decrease in the supply of permits raises the equilibrium bribe from $1,000 to $2,500. How much per year will the construction supervisor now receive if he is still getting half of all the bribes collected by the 10 inspectors? How much more is the construction supervisor getting now than when he had 20 inspectors working in part b? Will he personally be happy with the reduction in government services?