The utility function for commuting is u(w, 1, c) = -11 · w – 3 ·1 - 15· c, where w is walking time (in minutes), t is total travel time (in minutes), and c is cost (in £). How much is a typical consumer willing to pay to reduce total travel time by an hour? Enter your numerical answer in the box provided (round your answer to 1 decimal place):

The utility function for commuting is u(w, 1, c) = -11 · w – 3 ·1 - 15· c, where w is walking time (in minutes), t is total travel time (in minutes), and c is cost (in £). How much is a typical consumer willing to pay to reduce total travel time by an hour? Enter your numerical answer in the box provided (round your answer to 1 decimal place):

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 2DQ

See similar textbooks

Similar questions

Based on several observations, people at older ages tend to buy more luxurious products than when they were younger. Does this mean that diminishing marginal utility of money declines as people age?
You have k20 per week to spend and two possible uses for the money: telephoning friends back home and drinking coffee. Each Hour of phoning costs k2 and each cup of coffee costs k1. Your utility function is U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink. What are your optimal choices? What is the resulting utility levels? You can use the standard result on the constrained maximization of such a function, but must state in clearly
Marina decides to purchase a ring made from an alloy composed exclusively of gold (G) and titanium (T). The price of gold is $60 per gram, and the price of titanium is $30 per gram. Her total budget for the ring is $600. Her utility function is given by U(G,T) =GT. Suppose the price of titanium falls to $20 per gram. At the final basket, the optimal amount of titanium is（）grams.
You have k20per week to spend and two possible uses for this money,:telephoning friends back home and drinking coffee. Each hour of phoning costs k2 and each cup of coffee costs k1. Your utility functions U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink. Now suppose the price of telephone calls drops to k1 per hour. What are your optimal choices? What is the resulting utility level
You have £20 per week to spend, and two possible uses for this money: telephoning friends back home, and drinking coffee. Each hour of phoning costs £2, and each cup of coffee costs £1. Your utility function is U(X,Y) = XY, where X is the hours of phoning you do, and Y the number of cups of coffee you drink. What are your optimal choices? What is the resulting utility level? You can use the standard result on the constrained maximization of such a function, but must state it clearly. Now suppose the price of telephone calls drops to £1 per hour. What are your optimal choices? What is the resulting utility level? How much income per week will enable you to achieve the same quantities at the new prices as the ones you chose before? What income will enable you to attain the same utility as you did before? Comment on your answer in the context of equivalent variation and compensating variation.
Explain the difference between a utility function and correspondence
Consider U(q1,q2) = q1 + v(q2) where v' > 0 and v'' < 0. This utility function is called a quasi-linear utility function. Assume q1 is a numeraire. Find the demand function for q2. *What does v mean in this question? Also, could you solve this problem without using Lagrange multipliers? Thank you.
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
Let x be the number of pizza slices and y the number of Cokes. If John’s utility function is u = min{7x, 4x+ 12y}, then if the price of pizza slices is 20 euros and the price of Coke is 40 euros, John will demand ? a- 2 times as pizza slices as Cokes b- 3 times as pizza slices as Cokes c- 6 times as pizza slices as Cokes d- 4 times as pizza slices as Cokes e- 5 times as pizza slices as Cokes f- only Cokes
Ceja has utility function U=A2*B2 , where A equals the number of apples she eats each week, while B is the number of bananas she eats each week. Ceja has $20 to spend on fruit each week. The price of an apple is $1, while the price of a banana is $0.25. Find out the combination of Apples and Bananas that maximize Ceja’s satisfaction. If price of Banana is increased by $.25, what will be the new combination of A and B that would maximize her utility? Show graphically and drive the demand curve for Bananas
what problem could arise with consumers' net demand functions as any price becomes zero? what axiom of consumer theory is involved here? how might it be changed to exclude this possibility?
Unlike newspaper dispensing devices, soft drink dispensing machines do not permit people to take more than one can or bottle with each payment. The reason is that the: opportunity cost of additional cans or bottles of soft drink increase very rapidly. marginal utility of extra soft drink cans or bottles declines slowly, particularly because they are storable and can be consumed later. marginal utility of extra soft drink cans or bottles declines quite rapidly. opportunity cost of additional cans or bottles of soft drink increase very slowly.