Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 3PA
To determine
To find the number of sweaters bought.
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In May and June, Tammy spent all her clothing budget on bathing suits and beach bags. Each bathing suit costs $75. At Tammy's optimal choice, her marginal utility from the last bathing suit purchased is 300 and her marginal utility from the last beach bag purchased is 200. This means that each handbag must cost:
a. $50
b. $25
c. $100
d. $150
* Kate loves cookies and chocolates. The price of cookie is $1 per piece for the first 10 pieces and $4 per piece thereafter, while the price of chocolate is $2 for the first 10 pieces and $10 thereafter.
a) Kate’s has income $100. Placing the cookie on the horizontal axis and chocolate on the vertical axis, carefully sketch the budget set for Kate. Be sure to plot and label points of interests (such as kink points, intercepts and the slopes.
b ) Suppose cookies(x1) and chocolates(x2) are perfect substitutes to Kate, and she is always willing to substitute two cookies for one chocolate. De- rive Kate’s utility function.
c) Giventheinformationabove,findKate’sdemandforcookiesandchoco- lates.
please express final numerical answers in decimal format
Pareto eliminated psychology from economics:a. by defining utility as ordinal, not cardinal utilityb. searching for secondary qualities of thingsc. defined rationality as consumer behavior only after they have bought something several timesd. by accepting revealed preference.
Chapter 1 Solutions
Microeconomics
Ch. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQ
Ch. 1 - Prob. 11RQCh. 1 - Prob. 12RQCh. 1 - Prob. 13RQCh. 1 - Prob. 14RQCh. 1 - Prob. 15RQCh. 1 - Prob. 16RQCh. 1 - Prob. 17RQCh. 1 - Prob. 18RQCh. 1 - Prob. 19RQCh. 1 - Prob. 20RQCh. 1 - Prob. 21RQCh. 1 - Prob. 22RQCh. 1 - Prob. 23RQCh. 1 - Prob. 24RQCh. 1 - Prob. 1PACh. 1 - Prob. 2PACh. 1 - Prob. 3PACh. 1 - Prob. 4PACh. 1 - Prob. 5PACh. 1 - Prob. 6PACh. 1 - Prob. 7PACh. 1 - Prob. 8PACh. 1 - Prob. 9PACh. 1 - Prob. 10PACh. 1 - Prob. 11PACh. 1 - Prob. 12PACh. 1 - Prob. 13PACh. 1 - Prob. 14PACh. 1 - Prob. 15PA
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- What assumptions are necessary for supposing that individual preferences can be inferred and valued from the choices that individuals make?give a reasonarrow_forwardJill likes to consume coffee and cream in a very particular way: with every cup ofcoffee she always consumes two 0.5 oz. cream containers. Jill is a utility maximizer anddecides to spend her income is $120 per month on coffee and cream. If the price of eachcoffee cup is $2.50, and the price of each cream container is $0.25, she will consume______ cups of coffee and ______ cream containers per month.A) 48; 96.B) 96; 48.C) 240; 480D) 80; 40E) None of the above.arrow_forwardBilly is deciding whether to watch TV at home or go spend time with his friends. If Billy decides to stay home, it can be concluded that _____ Question 38 options: a Billy never prefers spending time with his friends to watching TV b Billy expected to get more utility from watching TV than spending time with his friends. c Billy expected to get more utility from spending time with his friends than watching TV. d Billy always prefers watching TV to spending time with his friends.arrow_forward
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