1. (2 points) Given the following preferencesu(x1,x2) = x5 + 0.98x95%3DSolve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2= 0.98.Show your work.

Answered: Image /qna-images/answer/24ba3c05-5322-49a3-932f-7d60d4a4a74b.jpg

Answered: 1. (2 points) Given the following…

1. (2 points) Given the following preferences u(x1,x2) = x5 + 0.98x95 .0.5 Solve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2 = 0.98. Show your work. %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 1. Jie thinks a cup of coffee is just as good as five cups of orange juice. Let M stand for the…

A: Jie thinks a cup of coffee is just as good as five cups of orange juice. This means for Jie, 1 cup…

Q: Consider a CES utility function. Derive ut as → 1. 쁩 0 = = (())) Ut + a (c21) ਜ 6-1 \ 6 -

A: The utility function refers to all those commodity bundles that derive the same amount of utility…

Q: Answer the following questions a) Steak and salad for a person who neither like nor dislike…

A: If a commodity is a “good” then the fundamental principle of ‘more is better’ follows. The…

Q: 1. If an individual consumer faced the following utility function: U(X,Y) = 2X² + Y³, where X, Y >…

A: A utility function is a mathematical function that maps a bunch of goods or services to a number…

Q: Lorelai's choice behavior can be represented by the utility function u(x₁, x₂) = 0.9ln(x₁) + 0.1x2.…

Q: PROBLEM (6) A consumer's preferences over pizza (x) and steak (y) are given by u(x,y) = x²y (HINT:…

A: The optimal bundle when px = $8 is (15, 20). This can be calculated by setting the marginal…

Q: 1. Joan is on summer break and spends most of her time either playing video games or browsing the…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subparts question…

Q: Lionel eats ham (x) and cheese (y). The utility function U(x, y) = 0.25x + 2y0.5 represents his…

A: "As stated by the client, the answer to parts d,e, and f is provided only." The Marshallian demand…

Q: The daily total utility per quantity of consumption is shown in the figure. This shows that the…

A: The additional satisfaction a client gets from possessing one additional unit of associate item or…

Q: ii) iii) iv) Draw the consumer's Indifference Curves for U(x) = 1. Shade the area for which U(x) ≤…

A: Here we are given the utility function and the budget of the consumer. And here the consumer will…

Q: y function: u = x0.64x2.36. He h by $1.00. Calculate t increases

Q: Question-3 (Finding optimal bundle) utility functions and budget constraints. 1. U (₁, ₂) = 3x₁ +2r2…

A: An optimal bundle is the combination of two goods that provide a consumer with the highest utility…

Q: U(x, y) = min(x, 5y) is the utility function of the consumer. In addition, px = 1, Py = 3 and M = 8.…

A: Given Utility function: U(x,y) =min(x,5y) ..... (1) The price of good x is 1 and the price of…

Q: A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in…

A: Utility refers to the satisfaction or benefit that a consumer derives from consuming a good or…

Q: Suppose u(x) = max{arı, ßr₂} for parameters a, ß > 0. (a) Will this consumer will spend all their…

A: Given: Utility function u(x)=Maxαx1,βx2

Q: Hot-dogs (P = $1) Apple pie slices (P=$2) Hot-dogs Total MUMU/P Apple pie Total MUMU/P…

A: We have price of hot dog is $1 and price of an apple pie slice is $2 and income of $9

Q: e) Do any of these three friends violate the property of "more is better" for junior mints? Or do…

A: Marginal utility:Marginal utility is the additional unit that is added to the total utility. It is…

Q: 3.11. Consider a consumer who is demanding goods 1 and 2. When the price of the goods are (2, 4), he…

A: Demand: It refers to the things that people consume. The increase in demand makes the increase in…

Q: Problem 1. Lolita. Lolita, an intelligent and charming Holstein cow, consumes only two goods, cow…

A: A budget line, also known as a budget constraint or price line, represents the various combinations…

Q: A consumer's preferences are represented by the following utility function: u(x, y) = 2/T+ Vg+7 1.…

A: Utility derived from (x3, y3) bundle will be: u(7, 6)=27+6+7u(7, 6)=14.74 Similarly, utility derived…

Q: Consider the utility function U(x, y) = xy + x. Which of the following bundles is not on the same…

A: We have to calculate the value of U for all (x,y). The bundle which gives the different result will…

Q: 8. Show that if strict preferences > over three outcomes x, y and z, do not satisfy transitivity, so…

A: 8. The strict preferences are the preferences that are strictly preferred. For example if x is…

Q: utility function:

A: A utility function is a mathematical illustration that assigns a numerical value to the pleasure or…

Q: Question 1 There are four utility functions defined as follows: U(x,y) 5 ln r +6 ln y U2(x, y) = r+y…

A: Solution1: We have U1x,y=5lnx+6lny .... (1) U3(x,y)=x5y6 .... (2) and…

Q: 4. Derive an equation for the indifference curve through the bundle (x2, y2) = (4,9). With an…

A: The graphical showcasing of consumers choices of two given goods which will provide the consumer…

Q: how to calculate indirect utility function for two goods, al and a2? Given that U(a1,a2) = a1 +…

A: Utility function refers to the function that gives the magnitude of satisfaction that a consumer…

Q: 3.4 Let c represent calories (or cigarettes), with u the strictly concave (immediate) utility of…

A: Step 1: To find the optimal level of consumption from the perspective of date 𝑡, we need to…

Q: Consider the following utility functions. (x,y) = −1 / [ min (6x, 2y)+1] ■(x,y) = min(6x,6y)² (x,y)…

A: Utility functions symbolizes the pleasure or satisfaction that customers feel after using a product…

Q: ate a table and graphs (a) Suppose we have preferer indifference curve through the bundle X = 30 and…

A: Utility function : U = 10 x2/3 y1/3 Budget Constraint : Px*x + Py*y = M Optimal consumption is…

Q: 2. Consider a consumer whose preference relation over the consumption set X = R³ can be repre-…

A: A utility function is a mathematical illustration that assigns a numerical value to the pleasure or…

Q: 4.11 CES utility The CES utility function we have used in this chapter is given by U(x, y) =+. a.…

A: b) For showing the Cobb-Douglas case: When δ=0xy=pxpy1/(0-1)=pypxx=pypxyNow putting the value of x…

Q: 3) For each utility function, determine the marginal utility with respect to x, marginal utility…

A: A utility function in economics is a mathematical representation of a consumer's preferences or…

Q: 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)…

A: By maximizing utility, the consumer will choose the good that has the highest marginal utility at…

Q: Mr. MacGregor's preferences are such that he is indifferent between the following bundles of (x,y):…

A: Answer: Given, Bundles: (x,y): (1,4), (2,2), (4,1) U = ln(xy) Let us find the utility at each…

Q: Lorelai's choice behavior can be represented by the utility function u(x₁, x₂) = 0.9ln(x₁) + 0.1x2.…

Q: 4. You are given the following information about consumer's optimal consumption choices for…

A: An indifference curve is a graphical presentation of the points that connect on a graph representing…

Q: (a) Suppose we have preferences U(X, Y) = min [X, 3Y]. Graph/sketch the indifference curve through…

A: Here we are given the utility function which is a function of 2 goods X & Y. And we are also…

Q: Consider the following utility functions. G(x,y) = −1 / [ min(6x,2y)+1] H(x,y) = min(6x,6y) L(x,y) =…

A: Utility is the amount of satisfaction that a consumer gets from the consumption of given good or…

Q: = (a). What kind of preferences are represented by a utility function of the form u(x1, x₂) √x₁ +…

Q: Abby likes tangerines and oranges. For every 4 tangerines, Abby is equally happy to consume 2…

A: We need to find combinations of x and y (number of tangerines and oranges, respectively) that give…

Q: Find the attached fie.

A: (Note: Since the question has multiple parts the first three has been solved. Please resubmit the…

Q: Dear Expert hero pro Hand written solution is not allowed.

A: Steps to Find Total Utility Function (U(x,y)) Recognize Marginal Utility: The provided functions (Ux…

Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

1. (2 points) Given the following preferences
u(x1,x2) = x5 + 0.98x95
%3D
Solve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2= 0.98.
Show your work.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

4B. Which one(s) of the following functions v(x, y) = 2x°y – 100, w(x, y) = 3(x + y) + 120, t(x, y) = xy - 150 is an ordinal utility function for a preference relation which admits u(x, y) = 3x/2y1/2 + 120 as an utility function? (a) w only (b) v and w (c) v and t (d) v, w and t (e) none of the previous four statements is correct. %3D %3!
The following five individuals have different utility functions over food (good x) and clothing (good y): 1) u₁(x, y) = 3x²y 2) u₂(x, y) = 2√x + y 3) Uz(x, y) = x0.6y0.4 4) u₁(x, y) = x² + y² 1 5) us(x, y) = x + 3y For each of these people: a) Compute their marginal utilities of good x, MUx = Ju(x,y) MU, = ду du(x,y) ax b) Check whether the property of "more is better" is satisfied for both goods? Explain. [Hint: Check whether marginal utilities are positive assuming positive amounts of good x and good y] ƏMUX əx and marginal utility of good y, c) Does the marginal utility of good x diminish, remain constant, or increase as each of the individuals buys more x? Explain. [Hint: There are 2 ways to do it: 1) visually check what happens to the expression of MUx when x increases (does it decrease, keep constant or decrease?); or 2) take the partial derivative of this marginal utility with respect to x, that is ƏMUx .aMUX ƏMUX If 0, the marginal utility of x is increasing in x] d) Does the…
Given the utility function U (x1, x2) = x³x2.7 select all that are true. a) 30% of the budget is spent on good 1. ○b) V (p, I) = 30.370.7 I 10 P1P2 c) If P2 = 2 and I = 60, then $18 is spent on good 21. d) If P1 = 9, P2 = 2, and I = 60 then the consumer enjoys 1.81 utils of utility. e) Half the budget is spent on good 1 and the other half is spent on 2.
5. Suppose a preference relation is represented by a utility function u(x₁, x₂) = x₁ + x₂. Explain why the function -u(x₁, x₂) = −x₁ - x₂ does not represent the same preference relation. It is enough to explain using two appropriate bundles.
If the prices for goods A & B are $5 & $12, respectively, and a customer has $200, which basket of goods (A, B) gives her the highest satisfaction that she can afford? (10, 10) We need her indifference curves (preferences) to know. (16,10) (10, 15) (15, 10)
If the prices for goods A & B are $5 & $12, respectively, and a customer has $200, which basket of goods (A, B) gives her the highest satisfaction that she can afford? (10, 10) (15, 10) (16, 10) We need her indifference curves (preferences) to know. (10, 15)
Please help me to solve questions (a) (b) (e). (especially question e). thank you!
1
|When Matt is buying cards and toys (C, T), his preferences are well behaved and he is indifferent between (60, 16) and (30, 24). For the following combinations, determine which he prefers, or if he is indifferent between the two. Show how you know. A. (31, 25) or (59, 15) B. (60, 16) or (45, 20)
If the utility function (U) between food (F) and clothing (C) can be represented as U = F*C, then which combination of food and clothing will a rational consumer choose? a. (F, C) = (9, 25) O b. (F, C) = (25, 4) O c. (F, C) = (4, 16) d. (F, C) = (4, 25)
Subpart 7 only
Find the optimal bundle using the following utility functions and budget constraints. 1. U(x,y)=lnx+yand2x+y=10 2. U(x,y)=3x+2yand3x+2y=24 3. U(a,z)=3a+2zand3a+6z=24 4. U(a,z)=a2z2 and4a+2z=485. U(x,z)=a2z3 and3a+2z=36