Assuming that Mohamed is maximizing his utility. His MUX/Px = 80 and MUY = 600. Then the price of Y must be Select one: A. 6.5 B. None of the answers are correct O C. 80 D. 600 O E. 7.5
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- Betty is looking for a job. She considers job opportunities intwo cities. Bettyís utility is given by y- x, where y is the lifetime income andx is the amount spent on buying a house. The income from City 1 fluctuatesalthough the house price is stable. On the contrary, the income from City2 is stable while the house price fluctuates. If she moves to City 1, Bettycan earn a lifetime income y1 with probability alpha and 1 + y1 with probability1-alpha . The house price in City 1 is x1. Moving to City 2 means that Bettycan earn an income of y2. However, the house price is x2 with probabilitygamma and 1 + x2 with probability 1-gamma . Do the following: (a) Write down theexpected utilities associated with living in the two respective cities, i.e., V1and V2. (b) Derive the condition under which Betty chooses City 1.Suppose Jimi has reference dependent preferences over guitars and money as in Tversky and Kahneman (1991). His utility functions are given below. Gains Gains 400 -2 -2 2 Guitars 2$ Losses Losses i-600 -2 What is the least amount of money Jimi is willing to accept to sell one of his guitars? (just enter a dollar amount, i.e., "10o0", not "$1000"Jien is just bored all the time; no amount of success makes him happy, it seems. Below is a list of his income for the last several years and the utility he experienced per dollar of income: Year Yearly Income Utility per Dollar Earned 2017 $60,000 2 utils 2018 $70,000 1.8 2019 $100,000 1.5 2020 $120,000 1 2021 $145,000 0.40 From the above, we can say that Jien most likely is different from most people economists study in terms of risk attitudes is "risk loving" will not take a fair bet has a utility of wealth curve that is a straight line
- The following figure shows a utility function for Dexter UTILITY 1,300 1.000 WEALTH (Dollars) 800 Refer to Figure 28-3. Suppose the vertical distance between the points (0, A) and (o, B) is 12. If his wealth increased from $1,300 to $1,800, then OaDexter would be more likely to buy insurance. Ob Dexters subjective measure of his well-being would increase by less than 12 units Dexter would change from being a misk-averse person into a person who is not risk averse Od Dexters subjective measure of his well being would increase by more than 12 unitsSanjay won a poker game against his friends. Now he has to choose between $600 (the winnings) and the chance to play a new game. In this new game, Sanjay has a 50% chance of winning nothing and a 50% chance of winning $1000. The following graph presents the utility function of Sanjay with respect to money: 1. By how much money would his winnings need to increase or decrease so that Sanjay isindifferent between the $600 and the new game? At a different table, Juan wins $800 in a blackjack game. Similarly, he has to choose between $800 or the chance to win a new game. In this game, Juan has a 45% chance of winning nothing and a 55% chance of winning $1000. The following graph presents the utility function of Juan with respect to money: 2. By how much money would his winnings need to increase or decrease so that Juan is indifferent between the $800 and the new game? Please enter a positive number for an increase or a negative number for a decrease.Columns 1 through 3 in the table below show the marginal utility which a particular consumer would get by purchasing various quantities of products A, B, and C. (1) Unit 1 2 696 AWN 3 4 5 7 (2) Marginal utility, A 18 16 14 12 10 8 6 (3) Marginal utility, B 39 36 33 30 27 24 21 (4) Marginal utility, C 12 10 053 If the prices of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility?
- Suppose that Omar’s marginal utility for cups of coffee is constant at 5.5 utils per cup no matter how many cups he drinks. On the other hand, his marginal utility per doughnut is 11 for the first doughnut he eats, 10 for the second he eats, 9 for the third he eats, and so on (that is, declining by 1 util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that he can spend only on doughnuts, coffee, or both. How big would that budget have to be before he would spend a dollar buying a first cup of coffee?Generally speaking the demand for a good will be more inelastic O if the good is very specific and narrowly defined. O the greater the time period being considered. O if the good is a luxury. O if the good makes up a small part of an individual's budget. 21 ttv MacBook Pro F8 F9 F7 D00 F4 F6 F5 F3Ann can finish a project either this week or next week. The delayed rewardsare 10 in either case. (The project can be done only once or not at all).Next week is busy and the cost of finishing the project are lower thisweek. Theimmediate costs are 4 this week and 6 next week.Ann has a quasi-hyperbolic utility withδ= 1 andβ <1. Imagine that Anndoes not finish the project this week. Then she should finish it next week (A) ifβ >0.6; (B) ifβ >0.4; (C) only ifβ= 1; (D) for anyβ.11. Suppose thatβ= 0.5 and Ann correctly anticipates her choice next week. Thenshe should finish the project (A) this week; (B) next week; (C) never; (D) not enough information. Suppose thatβ= 0.5, and Ann can commit to finish the project next week (e.g.by imposing a heavy cost on herself if the project is not finished nextweek).Then she will (A) do the project this week;(B) commit to do it next week and finish it then;(C) do it next week without commitment;(D) commit and then not finish it.
- Ann can finish a project either this week or next week. The delayed rewardsare 10 in either case. (The project can be done only once or not at all).Next week is busy and the cost of finishing the project are lower thisweek. Theimmediate costs are 4 this week and 6 next week.Ann has a quasi-hyperbolic utility withδ= 1 andβ <1. Imagine that Anndoes not finish the project this week. Then she should finish it next week (A) ifβ >0.6; (B) ifβ >0.4; (C) only ifβ= 1; (D) for anyβ.11. Suppose thatβ= 0.5 and Ann correctly anticipates her choice next week. Thenshe should finish the project (A) this week; (B) next week; (C) never; (D) not enough information. Suppose thatβ= 0.5, and Ann can commit to finish the project next week (e.g.by imposing a heavy cost on herself if the project is not finished nextweek).Then she will (A) do the project this week;(B) commit to do it next week and finish it then;(C) do it next week without commitment;(D) commit and then not finish it. Can you…Why tY not substituted for T?Gina is at a toy store and is buying toy T-Rex's (x), which cost på, and toy yaks (y), which cost py. Her income is I. She likes 3 T-Rex's as much as she likes 4 yaks. These toys are perfect substitutes for her.