U(x, y) = min(x, 5y) is the utility function of the consumer. In addition, px = 1, Py = 3 and M = 8. If the consumer is maximizing the utility, how many units of good x and how many of good y will the consumer buy? OX=4; Y=4/3 OX=0; Y=8/3 OX=8; Y=0 None of the above.
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- An individual’s utility function is given by where is the amount of leisure measured in hours per week and is income earned measured in cedis per week. Determine the value of the marginal utilities, when = 138 and = 500. Hence estimate the change in utility if the individual works for an extra hour, which increases earned income by GH¢15 per week. Does the law of diminishing utility hold for this function?True/False Marginal utility is 0 for the Consumption of the very first unit.When utility function U(q1, q2)=min{ 34.6 q1, 17 q2} and q1= 33 and q2= 60 are given, find utility level consumer gains?
- Assume that a∈[-1,1] and θ∈(0,2). The utility function is given by u(a,θ)=a(θ-1). Which of the following action is never optimal ex-post? a. 0 b. All can be optimal ex-post c. 1 d. -1True/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)Clarice has a utility function: U(Y) = 1000 - (100/Y), where Y is her income. clarice has just graduated from college and has a career choice for her first job of either working as a teacher and earning $40,000 or trying to become a theatre lighting director and earning $70,000 (if there is growth in the demand for theatre) or $20,000 (if there isn't growth in the demand for theatre). there is a 50% probability of growth. a consulting firm guarantees Clarice that it already knows whether there will be growth in the demand for theatre next year. what is the maximum amount Clarice should be willing to pay for this information?
- If point XYZ falls on different level pf indifference curve, what wil happen? a. point x maybe higher that point y or vice versa and well as Z b. the will have same quantity combination c. it will cost so much d. the will have different level of satisfaction If point XYZ falls on different level of indifference curve, what will happen? a. XYZ will have same quantity combination b. satisfaction is the same c. no satisfaction is derived because it doesn't have a cost d. point z will equal point x and y in yielding satisfaction More than zero but less than one is what kind of price elasticty a. relatively elastic b. relatively inelastic c. perfectly elastic d. perfectly inelasticTrue/False Marginal utility refers to the satisfaction or pleasure that occur due to the additional consumption of one more unitIndifference curve assumption where consumers aim to maximise utility given income andprices of products is called ________________________assumption.A. Ordinal util.B. Non-satiety.C. Rationality.B. Transitivity2. Economic profit =A. Total Revenue – Explicit costs.B. Total Revenue – Total costs.C. Total Revenue – Implicit Cost.D. Total Revenue – Opportunity cost.3. _____________________is a firm that owns, controls and manages assets in many countries.A. Sole trader.B. Partnership.C. Multinational firm.D. Monopoly.4. Which one of the following is remuneration for capital?A. Wages.B. Interest.C. Profit.D. Rent 5. ____________________is market structure with one single seller.A. Monopolistic competition.B. Monopoly.C. Perfect competition.D. Oligopoly.6. Complete the following table to answer question 6: Quantity of oranges Total utility Marginal utility 0 0 1 10 2 25 3 31 4 35 5 37 6 33 At which level of…
- If an indifference curve is a vertical line, does theamount of the good on the y -axis influence theconsumer’s utility?Utility Maximization. Suppose that an individual has a utility function given asU =√XYwhere U is the total utility, X is the quantity of good X that is consumed, and Y is the quantity ofgood Y consumed.It follows thatMUxMUy= X/Ywhere MUx is the marginal utility of X and MUy is the marginal utility of Y.The individual’s budget constraint isI = PxX + PyYwhere I is income, Px is the price of good X, and Py is the price of good Y.Suppose that Px = 2, Py = 1, and I = 100. How much of X and Y does this individual purchase?Assume that a∈[-1,1] and θ∈(0,2). The utility function is given by u(a,θ)=a(θ-1). Which of the following action is never optimal ex-post? a. 0b. All can be optimal ex-postc. 1d. -1