Suppose U(x1, x2) = 2x}x}, the price of good 1 is 2, and the price of good 2 is 3. If the income of the consumer is 40, what are x; and x;? %3D
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- True/ false Describe Since a greater utility number indicates that a consumer is better off, utility numbers cannot be negative.A consumer has a budget of $3000 in a given period, and wishes to buy two goods, X and Y, so as to maximise his utility. The price of good X is $5 and the price of good Y is $2, and his MRS is given by the formula 2Y/X. How many units of good X will he buy in that period?A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in particular: a 2001 French Bordeaux (xf) at $40 per bottle and a less expensive 2005 California varietal wine (xc) priced at $8. If her utility is U(xf, xc) = xf2/3xc1/3, then how much of each wine should she purchase?
- 15. Lorenzo lives on x and y alone. His utility function is U(x, y) = min{3x + 4y, 7y}. The prices of both goods are positive. He will a. never buy more x than y. b. buy equal amounts of the two goods. c. always buy more y than x. d. always buy more x than y. e. More than one of the above is true.George has utility function U (x, y) = min (0.5x, 5y) and income Y = 76. If the value is px = 2 and py = 10. What is the best choice for good x? a. 38.00 b. 56.44 c. 25.33 d. 40.00 e. 18,13 f. 0.00 g. 9.21 h. None of the optionsAssume someone has a utility function of U = Min[3X, Y]. They currently have 8 units of X and 3 units of Y. The price of X is $12 and the price of Y is $3. If this person could sell some units of X and/or Y what level of utility could they achieve?
- 1. The consumer has the utility function u(x1, x2)= x1 0.5x2 1/2 with a price level of x1 is $2 and the price of good x2 is $2, and he has income by 100. Then, the price of item 1 drops to $1, then how much compensating and equivalent variations?The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is 20 then the marginal utility of good "b" must be ________ to have an optimum combination of goods purchased. 80 20 60 41. Suppose that a consumer’s utility function for two goods (X and Y) is U(X,Y) = 10X^0.5 + 2Y , with MUx = 5X-0.5 and MUy = 2. The price of good X is $5 per unit, the price of good Y is $10 per unit, and the income is $275. a. Find the utility maximizing quantities of X and Y. b. If instead, the price of good Y is $20 per unit, how does your answer change?
- 33. Suppose MRSx,y = MUx/MUy = 0.1(a) If the consumer substitutes 10 units of X for one unit of Y, then the utility remainsunchanged(b) Regardless of prices, the consumer will only consume Y(c) If the consumer substitutes 1 unit of Y for 0.1 unit of X, then the utility remainsunchanged(d) Regardless of prices, the consumer will only consume XSuppose a consumer’s preferences can be represented by the utility function U(X,Y) = Min (2X,Y). Also, suppose the consumer has $300 to spend and the price of Good X is PX = $2 and the price of Good Y is PY = $5. If the consumer maximizes their utility subject to their budget constraint, how much of Good X and how much of Good Y will the consumer purchase? X* = Y* =.Question 2. A consumer has the utility function U(q1,q2) = q10.5 + q2Assume p2 = 1 and Y = 100. What is the equivalent variation of a price increase for good 1 from 1 to 4?
