EBK MACROECONOMICS (FOURTH EDITION)
4th Edition
ISBN: 9780393616125
Author: Jones
Publisher: YUZU
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Chapter 16, Problem 3RQ
To determine
Life time utility function.
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What is a lifetime utility function, and in what sense does it exhibit diminish-ing returns?
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- Explain the difference between a utility function and correspondencearrow_forwardWhat are the points of MAXIMIZATION?arrow_forwardIf Sam's utility function is given by U(x, y) = x3y, what is the indirect utility function? (a) V (Pr. Py, I) = (b) V (Prs Py, 1) = I Pr+Py (c) V (Pa. Py, 1) = (1) I 2pz+3py Pu (d) V (PPy, 1) = () () (e) V (pas Py, 1) = 51 2px+3pyarrow_forward
- Explain how utility could be used in a decision where performance is not measured by monetary value.arrow_forwardQ- Marginal utility can never be negative. True/Falsearrow_forwardFor each of the following utility functions get the marginal utility of consumption of each of the goods. 1/2 1/2 (a) u(a,b) = a b (b) u(x, y) = x³/4y1/4 (c) u(a, b) = n(a) + In(x) (d) u(x, y) = ln(x) + ln(y) (e) u(a, b) = 2xa +Xbarrow_forward
- Economics Anna's investment is worth $2.5 million (decreased from $3.5 to $2.5 million) Elsa's investment is worth $2.2 million (increased from $2 to $2.2 million) For each of them write down the reference utility function (First determine the reference point (use a parameter) and derive reference utility function for each).arrow_forwardSuppose that the indirect utility function takes the form(p, y) = f (p)y. What is the form of the expenditure function? What is the form of the indirect compensation function, p(p; q, y) in terms of the function f (.) and y?arrow_forwardif the utility function is given by u=x^2y^2 what is marginal utility?arrow_forward
- What are the types of utilityarrow_forwardDefine the term rational consumer in economics. Use appropriate examples.arrow_forwardUtility is a type of function that occurs in economics. When a consumer receives x units of a certain product, a certain amount of pleasure, or utility U, is derived. The graph represents a typical utility function. a) Find the average rate of change of U as x changes from 0 to 1; from 1 to 2; from 2 to 3; from 3 to 4. b) Why do the average rates of change decrease as x increases? a) The average rate of change of U as x changes from 0 to 1 is. (Type an integer or a decimal.) C Utility (pleasure units) AU 200- 150- 100- 50- 0 (1,67) (2,106) I (3,134) (4,156) 2 Number of units of product 4 Xarrow_forward
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