8 The following graph displays Bill's indifference curves:Pepsi20-Cokea. What type of utility function generated these indifference curves?O A. Cobb DouglasB. Perfect SubstitutesC. Perfect ComplementsO D. Leontieffb. If Pepsi costs $2 per bottle, while Coke costs $1, and Bill has a $20 budget to spend for the month, what is the budget constraint?O A. 20 + P 20O B. P+ 20 = 10OC. P+C= 10O D. 2P + C= 20C. How much Coke will Bill buy?coke 1 2If the utility function and budget constraint are U = x°Y; 2x + 4Y = 120a. What is the MRS of the utility function?3.b. What is the slope of the budget constraint?c. What is the optimal bundle of X and Y?d. What is the maximum level of utility the consumer can obtain?

Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…

The following graph displays Bars indifference curves: Pepsi Coke a. What type of utility function generated these indifference curves? A. Cobb Douglas OB. Perfect Substitutes OC. Perfect Complements OD. Leontieff b. If Pepsi costs $2 per bottle, while Coke costs $1, and Bill has a $20 budget to spend for the month, what is the budget constraint? OA 2C+P 20 OB. P+2C 10 OC. P+C = 10 D. 2PC 20 Hooke

The following graph displays Bars indifference curves: Pepsi Coke a. What type of utility function generated these indifference curves? A. Cobb Douglas OB. Perfect Substitutes OC. Perfect Complements OD. Leontieff b. If Pepsi costs $2 per bottle, while Coke costs $1, and Bill has a $20 budget to spend for the month, what is the budget constraint? OA 2C+P 20 OB. P+2C 10 OC. P+C = 10 D. 2PC 20 Hooke

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Similar questions

Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
Would you expect total utility to rise or fall with additional consumption of a good? Why?
As a college student you work at a part-time job, but your parents also send you a monthly allowance. Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?