8 Rue's utility function is U(z, y) = min{z, 3y}. Jules' utility function is U(z, y)min{r, Vy).%3!!!4(a) Which of the bundles A (4, 0.5), B = (3, 2) and C = (2, 4) does Rue prefer? Whichof the bundles does Jules prefer?(b) For Rue, draw the indifference curve, denoted as I, that contains the bundles thatshe likes exactly as well as bundle (4,2). On the same graph, draw the indifference curve Ifor Rue that passes through bundle (6,3) and draw the indifference curve I, for Rue thatpasses through bundle (8,3). Does her preference satisfy convexity?

An indifference curve is a graphic presentation of integrated products that offer an identical type…

Rue's utility function is U(z, y) min{z, 3y}. Jules' utility function is U(z,y) min{z, y). (a) Which of the bundles A (4, 0.5), B = (3, 2) and C (2, 4) does Rue prefer? Which of the bundles does Jules prefer? (b) For Rue, draw the indifference curve, denoted as I1, that contains the bundles that she likes exactly as well as bundle (4,2). On the same graph, draw the indifference curve I2 for Rue that passes through bundle (6,3) and draw the indifference curve I, for Rue that passes through bundle (8,3). Does her preference satisfy convexity?

Rue's utility function is U(z, y) min{z, 3y}. Jules' utility function is U(z,y) min{z, y). (a) Which of the bundles A (4, 0.5), B = (3, 2) and C (2, 4) does Rue prefer? Which of the bundles does Jules prefer? (b) For Rue, draw the indifference curve, denoted as I1, that contains the bundles that she likes exactly as well as bundle (4,2). On the same graph, draw the indifference curve I2 for Rue that passes through bundle (6,3) and draw the indifference curve I, for Rue that passes through bundle (8,3). Does her preference satisfy convexity?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Similar questions

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?
A consumer with $120 income and the utility function u(x,y) = (x^2)y where x is food and y clothing can go for shopping in one of the two stores A or B, where the prices for food and clothing are respectively pAx = 1, PAy = 80 and PBx = 8, PBy = 1. (a) If she can visit only one of the stores, which one would she go and what would be her optimal bundle there? Could she afford this very bundle at the other store? (HINT: How happy would she be if she chooses to go to store A for shopping? To store B? Which one is higher and what bundle would she buy there?) (b) If she can freely visit both stores (so that she buys each good from the store where it is sold cheaper), what would be her optimal bundle? What would she buy from each store? (c) How much money would she be willing to give up (out of her $120 budget) for the ability to visit both stores as in (b) rather than being restricted to shopping in only one store (the one she chooses in (a)? (HINT: suppose she pays $A for this privilege.…
Q13 please help fast all info is there Suppose the utility function of a consumer is characterized by U(x1, x2) = 2x1 + x2. Find the optimal bundle for this consumer if the p1=1, p2=1, and m=6.
Lucy's company has just promoted her to a managerial position and given her a new office. She is very fond of small Persian carpets and Native American paintings and wants to get some carpets and paintings for her office. Her utility function for carpets (x) and paintings (y) is given by ?(?,?)=√?? Using Excel's charting tool, draw an indifference curve for U = 4 and another one for U = 6, where both indifference curves contain 1, 2, 4, and 8 carpets on a graph, with carpets on the horizontal axis and paintings on the vertical axis.
You are maxiimizing utility when :A)(MU of X)/(P of X) < (MU of Y)/(P of Y). B)(MU of X)/(P of X) > (MU of Y)/(P of Y). C)(MU of X)/(P of X) = (MU of Y)/(P of Y). D)(MU of X)/(P of Y) = (MU of Y)/(P of X).
Lucy's company has just promoted her to a managerial position and given her a new office. She is very fond of small Persian carpets and Native American paintings and wants to get some carpets and paintings for her office. Her utility function for carpets (x) and paintings (y) is given by U(x,y)=√xy Using Excel's charting tool, draw an indifference curve for U = 4 and another one for U = 6, where both indifference curves contain 1, 2, 4, and 8 carpets on a graph, with carpets on the horizontal axis and paintings on the vertical axis.
10. Consider the utility function U(x, y) = xy + x. Which of the following bundles is noton the same indifference curves as the others. Note: The first entry is the amount of x, thesecond is the amount of y.(a) (5,1)(b) (2,4)(c) (4,2)(d) (2.5,3)
A maximizing consumer with preferences given by u = x^2+ y^2 allocates 60 dollars of income at pY= 3 and pX= 4. Provide an indifference curve and budget line diagram to illustrate and quantify her utility-maximizing choice a Bundle A. Next month the price of good x will fall to pX= 2. Update your diagram to show the Hicksian compensating and equivalent variations for this price change as Bundles B, C, and D.
A consumer is having a monotonic preference. What can you say about his preference on these bundles (10,10) (10,9) (9,9)
Suppose a consumer is indifferent between the bundles (x1, x2) = (19, 10) and (15, 16), and suppose that the same consumer prefers the bundle (15, 14) to both. What can you say about his/her preferences when evaluated against standard assumptions of consumer preferences?
Suppose you have utility given by U = x^.5y^.5. Px = $1 and Py = $1, m=$12. If the price of y increases to $3, calculate the equivalent and compensating variation. Illustrate the answer graphically
Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products G and H. Units of G MUG Units of H MUH 1 36 1 70 2 33 2 60 3 27 3 55 4 21 4 45 5 18 5 30 6 12 6 25 7 6 7 15 If the consumer has a budget of $29 and the prices of G and H are $3 and $5, respectively, the consumer will maximize their utility by purchasing Multiple Choice 3 units of G and 4 units of H. 4 units of G and 2 units of H. 1 units of G and 5 units of H. 2 units of G and 5 units of H.