The consumer's utility function is u(x,y)=x³y*. She is has an income of 43 and the price of good 2 is 11. If the price of good 1 changes from 5 to 11, what is the equivalent variation?
Q: Suppose that a consumer's indifference curve map does not obey the assumption of a diminishing MRS,…
A: An indifference curve shows all the combination of goods that gives same level of satisfaction or…
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: Suppose that indifference curves are described by straight lines with a slope of −b. Given arbitrary…
A: Straight-line indifference curve: The straight-line indifference curve has a constant slope…
Q: The consumer's utility function is given by u(x,,x2) = min{x,+4x2,4x,+x}. Her income is m=20 and the…
A: We are going to solve for optimal bundle involving perfect complements to answer this question.
Q: Suppose that a consumer has the utility function u(x1,x2) : quantity of good i consumed, i = 1, 2.…
A:
Q: Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, which of…
A:
Q: An individual has the utility function U=4X 0.5Y 0.5 and can buy good X at £ 2 a unit and good Y…
A: Answer to the question is as follows :
Q: What kind of preferences are represented by a utility function of the form u(x1, x2) = √x1 + x2?…
A: If the MRS is constant for both the goods, it implies that the consumer is ready to exchange one…
Q: Given the budget line, M = PxQx + PyQy, what is the intercept of good X.
A: Given the budget line equation is PxQx+PyQy=M
Q: QUESTION 3 Consider an individual who has a utility function U(X,Y) = 2x1/2)+ y(/2), the prices of…
A:
Q: If the utility function of a consumer is given by U(X, Y)= VX+ 2vY. Which one of the following…
A: Indifference curve is the curve which shows the combination of two goods in which consumer gets the…
Q: For the following utility function find the MRS at (x, y) = (2, 3) a) U(x, y) =2x +y b) U(x, y)…
A: We know, MRS = MUx / MUy Given (x, y) = (2,3)
Q: suppose a consumer's utility function is given by U(X,Y) = X*Y. Also the consumer has $288 to spend,…
A: Given: U(X,Y) = XYPrice of XPx=16Price of YPy=16
Q: A consumer has utility u(x,y) = 10vy+x.The price of x is fixed at $1 and income is $100. Find the…
A:
Q: As a consumer moves along an indifference curve, then each point to the right will show higher…
A: Indifference curve is an indicative curve for any firm which shows combination providing equal…
Q: Consumer has the following utility function U (x, y) =x^1/2 × y^1/2, where the price of good x is…
A: A buyer maximizes the utility from consumption by choosing the levels of x and y where the value of…
Q: Total utility is maximized when marginal utility becomes (positive, zero, negative)
A: The utility is a want satisfying power of a commodity. Marginal utility is the additional utility…
Q: A consumer has income I and faces prices p1 and p2 for goods 1 and 2. The corresponding quantities…
A:
Q: Ice cream and cakes are perfect substitutes for a child, and 2 units of ice cream is always worth 3…
A: The utility in terms of economics can be defined as the amount of satisfaction or happiness that a…
Q: A consumer utility function is U=(x1,x2) Where X1 is the quantity of good 1 that is bought, X2 is…
A: Optimality of utility is attained where utility is maximized subject to budget constraint.
Q: Derive utility maximisation of a consumer using the tool of indifference curve analysis
A: An indifference curve is defined as a curve which shows various combinations of two goods that the…
Q: Diogo has a utility function, U(a,, 92) =q, 02., 0.8 where q, is chocolate candy and q2 is slices of…
A: Optimal condition is that condition where MRS is equal to price ratio.
Q: A consumer has the following utility function: U(X1,X2) = X1X2 + X1 + 2X2 Where X1 is her…
A: The utility function calculates a consumer's happiness or welfare as a function of their consumption…
Q: A consumer utility function is U = 1 log x1 + log x2. His budget constraint is given by 2x1 + 4x2 =…
A: The consumer is in equilibrium when he gets maximum satisfaction out of his expenditure. The…
Q: Isn't the utility function is perfect complement: min{} and the indifference curves should be…
A: A potential extension to the analysis is general equilibrium analysis or how demand and supply…
Q: Suppose a consumer's utility is given by: u (x1, x2) = a^/x¡ + b/x2 Where a= 8, and b = 4 What is…
A: Marginal utility measures the change in total utility due to additional unit consumption, keeping…
Q: What is the logarithmic transform of the utility function U= , given the budget constraint Pa, 21 +…
A: We have to find logarithmic transform of the utility function.
Q: The marginal utility of the 8th can of beer is
A: In economics, marginal utility refers to the additional satisfaction or benefit (utility) a buyer…
Q: A consumer has the indifference map shown below. The market prices of X and Y are $20 and $12,…
A: Utility maximization is a strategic scheme whereby individuals and companies seek to achieve the…
Q: A consumer is in equilibrium and is spending income in such a way that the marginal utility of…
A: The consumer is consuming two goods, X and Y in equilibrium. MU from X=20units MU from Y=35units…
Q: Question 8 Given the utility function U = 2x+5y, what is the equation of the indifference curve that…
A: Utility refers to the satisfaction derived from the consumption of good. The utility function shows…
Q: The Slutsky matrix below belongs to a consumer with a regular utility function of three goods, with…
A: As we know that Slutsky matrix is symmetric matrix. Therefore, By solving the metrics we can find…
Q: Bridget's preferences for apples( X) and bananas(Y) can be represented by the utility function…
A: Utility refers to the satisfaction obtained by the consumers from a good or service. While ,…
Q: Find marginal utility MU for a consumer consuming x amount of a given commodity, where his total…
A: Utilty is defined as the satisfaction which the consumer gets by consuming the homogeneous units of…
Q: Alice has preferences described by utility function u(x1, x2)3(x1+2*x2)^0.5. Suppose that p1=4,…
A: The utility function is: U(x1,x2)= (x1+2*x2)0.5 Calculating the MRS: MRS= MUx1/MUx2 MUx1=…
Q: Assuming utility positively depends on two goods, indifference curves can cross or intersect. True…
A: Indifference curve is a graphical representation which shows different level of combinations of two…
Q: Charlie's utility function is U(xa, XB) = Ax“xr-a) AB where A > 0 and a > 0
A: Correct : 1
Q: Consumer has the following utility function U(x,y) = x1/2y1/2 , where the price of good x is 1$ per…
A: The marginal rate of substitution refers to the rate at which a consumer can sacrifice one good to…
Q: Given a utility function of 2 goods X and Y: U (X, Y) = X +Y4, the marginal utility of X [ Select ]…
A: According to the question, utility function is given as : U(X,Y)=X4+Y4 Marginal utility of good X=…
Q: For the following utility function find the MRS at (x, y) = (2, 3) a) U(x, y) =2x +y b) U(x, y)…
A: We know, MRS = MUx / MUy Given (x, y) = (2,3)
Q: Consider a consumer whose preferences are represented by a utility function u(a, y) = a0.5 5. Are…
A: Utility function can be defined as the measure for a group of goods and services preferred by…
Q: Since the consumer is indifferent between all points on an indifference curve, no point is…
A: According to the consumer theory, if an individual is consuming the positive amount of two goods…
Q: Utility Maximization. Suppose that an individual has a utility function given as U =√XY where U is…
A: Given, Utility function, Marginal utility of X, Marginal utility of Y, The slope of the…
Q: For each of the following utility functions draw the indifference curve that passes through (1,1).…
A: To draw indifference curve , we just fix the utility to any arbitrary number and take some points.
Q: A person with utility function Ux, y) = 5+ y+ 2x has nonconvex preferences. True False
A: Answer:- TRUE
Q: A consumer is in equilibrium and is spending income in such a way that the marginal utility of…
A: A person can maximize his utility at the point where the marginal utility per dollar derived from…
Q: If the utility function is : u= q1q2. find the slope of an indifference curve. What will be its…
A: Slope of indifference curve = Marginal rate of substitution (MRS).
Q: Find the marginal utility of an additional unit of good z for a consumer with utility function = zi…
A: Marginal utility is the added satisfaction a consumer gets from having one more unit of a good or…
Step by step
Solved in 3 steps
- Suppose that the consumer maximizes his utilitysuch that the marginal utilities of goods X and Y are; MUx=80-16x MUy=60-2y Let Px=P4,Py=P2 and I=P80 Find the utility maximizing quantities X and YAssume that an individual has convex indifference curves (i.e. diminishing MRS). Suppose the individual has $3 to spend on good #1 and good #2. In addition, suppose we know that at the bundle where q1=1 and q2=1, the marginal utility of good #1 is 2 utils and the marginal utility of good #2 is 1 util. Given this information, which set of prices would this individual prefer to face? A. p1=1 and p2=2 B. p1=2 and p2=1 C. p1=2 and p2=2A consumer consumes pizza and soda always in the fixed proportion of 3 slices of pizza (x) with 2 cups of soda (y). Any pizza or soda not consumed together with the proportional amount of the other is useless to her. (a) Write down a utility function u(x,y) that represents her preferences. (b) If she has I = $60 budget and px = 4, py = 4, what is her optimal bundle? (c) In (b), If the price of soda increases to $6, how much money should she be compensated so that she achieves the same level of utility before the price increase? (d) Returning to (b), If the price of soda increases to $6, how much should the price of pizza be reduced so that she achieves the same level of utility before the price hike? (e) In (a), what values of a and b she is indifferent between the bundle "30 slices of pizza and a cups of soda" and the bundle "b slices of pizza and 40 cups of soda". Find at least two (a,b) pairs to get full points.
- An agent has utility u(x1, x2) = (x-11+x-12)-1for goods x1 and x2. The prices of the goods are p1 and p2. The agent has income m. a) Show preferences are convex. You can do this graphically or by showing that MRS is decreasing in x1. b) Solve for the agent’s optimal choice of (x1, x2). c) Show the agent’s indirect utility function is given by:V=m(p1/21 + p1/22)2For the utility function U = Qx0.31Qy(1-0.31) find the trade-off rate between good X and good Y at Qx= 7 and Qy=17 Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).Suppose you have utility given by U = x^.5y^.5. Px = $1 and Py = $1, m=$12. If the price of y increases to $3, calculate the equivalent and compensating variation. Illustrate the answer graphically
- Suppose a consumer has the following utility function: U(x1,x2) = alnx1 + (1-a)lnx2. The price of good 1 is $10 and the price of good 2 is $20 and the consumer’s income is $500. Find the quantities of x1 and x2 that will maximize utility if a=1/2.Given that utility function for a consumer is given by u = (x-3)2 + (y-4)2, draw any twoindifference curves for this consumer while clearly labelling the higher one as ‘H’ and lower oneas ‘L’. Does he prefer more of a good to less of it? Does he prefer averages to extremebundles? Explain.A consumer has a perfect complements utility function, where she prefers to have one unit of H with each unit of G. Also, she has an income of $210. Assume that the price of H is $8 and the price of G is $6. What is the consumer's optimal choice for good G*? Group of answer choices 11 12 15 16