1. If a consumer has a utility function u (x1, x2) spend on good 2? = x1x, what fraction of her income will 2. For what kind of preferences (or utility) will the consumer be just as well-off facing a quantity tax as an income tax that raises the same money for the government? 3. When prices are (P1, P2) = (1,2) a consumer demands (x1, x2) = (1,2), and when prices are (P1, P2) (2,1) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with = the model of utility maximization? 4. When prices are (P1, P2) = (2,1) a consumer demands (x1, x2) = (1,2), and when prices are = (P1, P2) (1,2) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with the model of utility maximization?
1. If a consumer has a utility function u (x1, x2) spend on good 2? = x1x, what fraction of her income will 2. For what kind of preferences (or utility) will the consumer be just as well-off facing a quantity tax as an income tax that raises the same money for the government? 3. When prices are (P1, P2) = (1,2) a consumer demands (x1, x2) = (1,2), and when prices are (P1, P2) (2,1) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with = the model of utility maximization? 4. When prices are (P1, P2) = (2,1) a consumer demands (x1, x2) = (1,2), and when prices are = (P1, P2) (1,2) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with the model of utility maximization?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:1. If a consumer has a utility function u (x1, x2)
spend on good 2?
= x1x, what fraction of her income will
2. For what kind of preferences (or utility) will the consumer be just as well-off facing a
quantity tax as an income tax that raises the same money for the government?
3. When prices are (P1, P2) = (1,2) a consumer demands (x1, x2) = (1,2), and when prices are
(P1, P2) (2,1) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with
=
the model of utility maximization?
4. When prices are (P1, P2) = (2,1) a consumer demands (x1, x2) = (1,2), and when prices are
=
(P1, P2) (1,2) the consumer demands (x1, x2) = (2,1). Is this behavior consistent with
the model of utility maximization?
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