10. Deriving demand from an indiference mapFrances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problemthat the price of an Americano is held constant at $3.On the following graph, the purple curves (I and I₂) describe two of Frances's indifference curves. The lines BC, and BC, represent bro budgetconstraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints.AMERICANOSR2Xpe1614DANISHES1214ON18 AK 20Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danahes is thing the income artiount you just computed, complete the following table fry finding the price of a danish when BC represents Frances's budgetconstraint and when IC represents her bodget constraint. Then indicate the quantity of danishes consumed in each of those scenariosPriceWhen Frances's budget constraints (Dollars per danish)BOBOGiven the price quantity combinations from the preceding table, use the blue ine (circle symbol) to plot Frances's demand for danishes on thefollowing graph.Consumption(Danishes)Hint: Assume that Frances's demand for danishes is a straight line. You should derive two points on the demand curve from the preceding graph.Then place the blue line on the following graph so that it passes through these two points.(2)PRICE(Doe de1221QUANTITY (Danish)Demand

Demand Schedule: Demand schedule for a good is a combination of different price and optimal quantity…

10. Deriving demand from an inddference map Frances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem that the price of an Americano is held constant at $3. On the following graph, the purple curves (I and Ia) describe two of Frances's indifference curves. The lines BC, and BC represent tro budget constraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints. AMERICANOS 1 DANISHES 14 16 Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danishes is

10. Deriving demand from an inddference map Frances recently moved to San Diego, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem that the price of an Americano is held constant at $3. On the following graph, the purple curves (I and Ia) describe two of Frances's indifference curves. The lines BC, and BC represent tro budget constraints. Points X and Y show Frances's optimal consumption bundles subject to the budget constraints. AMERICANOS 1 DANISHES 14 16 Given the preceding graph and knowing the price of an Americano is $3, Frances's available income for Americanos and danishes is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Caroline recently moved to San Francisco, where they developed a taste for drinking Americanos and eating danishes. Assume throughout this problem that the price of an Americano is held constant at $4. On the following graph, the purple curves (₁ and ₂) describe two of Caroline's indifference curves. The lines BC, and BC₂ represent two budget constraints. Points X and Y show Caroline's optimal consumption bundles subject to the budget constraints. AMERICANOS 18 16 4 2 0 D 10 DANISHES 12 14 16 18 20 ? Given the preceding graph and knowing the price of an Americano is $4, Caroline's available income for Americanos and danishes is $ Using the income amount you just computed, complete the following table by finding the price of a danish when BC₁ represents Caroline's budget constraint and when BC₂ represents her budget constraint. Then indicate the quantity of danishes consumed in each of those scenarios. Price When Caroline's budget constraint is... (Dollars per danish) BC₁ BC₁₂…
Q5. Jason has preferences defined over novels (good x) and DVDs (good y) described by the utility function U(x,y)= x2y2. He has an income of $120; novels cost $5 each, while DVDs are priced at $15 each. [Hint: MUx=2xy2, MUy=2x2y] a) Sketch Jason's budget constraint, indifference curves and the interior solution in a graph. b) Calculate Jason's optimal consumption bundle, and his maximized utility level. Suppose the price of novels increases to $7.5, while the price of DVDs and income are unchanged. c) Calculate his new optimal bundle, show it in the same graph from a), and interpret the Marginal Rate of Substitution (MRS) at this new optional bundle (point).
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Emily is a utility maximizer. Her income is $100, which she can spend on cafeteria meals and on notepads. Each meal costs $5 and each notepad costs $2. At these prices Emily chooses to buy 16 cafeteria meals and 10 notepads. a) Draw a diagram that shows Emily’s choice using an indifference curve and her budget line, placing notepads on the vertical axis and cafeteria meals on the horizontal axis. Label the indifference curve, I1, and the budget line BL1. Make sure you calculate the endpoints of the budget constraint. b) The price of notepads falls to $1; the price of cafeteria meals remains the same. On the same diagram, draw Emily’s budget line with the new prices and label it BL2. c) Lastly, Emily’s income falls to $90. On the same diagram, draw his budget line with this income and the new prices and label it BL3. Is she worse off, better off, or equally as well off with these new prices and lower income than compared to the original prices and higher income?
Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $
10. Assume an individual's preferences are represented by the following indifference map and he has an income of S400. Which of the following is shown when the price of Good I is $20 and the price of Good 2 increases from $10 to S16? Note: Even though the price of Good 2 is increasing, the steps to determine the income and substitution effects are the same. 50 45 40 35 30 25 20 15 10 10 15 20 25 30 35 40 45 50 Good 1 Good 2 is a normal good. Good 2 is an inferior good, but not a Giffen good. Good 2 does not satisfy the Law of Demand. • Ignoring the Income Effect, the Substitution Effect will cause the individual to consume more of Good I. A. B. 21 C. 3 None of the above statements are true. D. Good 2
4. Use the following information to calculate Wren's optimal bundle and his resulting utility: IC:U(x,y) = x0.5, 0.5 Px = 1, Py = 4, m = 48
Please answer fast please arjent help please
The following figure shows the indifference curves and two budget line of student Tuna whose choices are apple and banana. The Initial price of Banana is €4/kg, when budget line is B1. Initially Tuna was at equilibrium at point A. Answer the following questions according to the information given on the diagram. Show your calculations below. a. What is the weekly Income of Tuna? (). b. If Tuna's initial preference is at A how much Banana she consumes? (" c. If Price of Banana decreases to €3/kg and she moves to point B, how much Apple she will consume at B? (. d. If the demand curve for Banana will be derived by using the indifference curves on figure 1, what will be the Price and quantity coordinates of Point A and Point B on figure 2? Apples Price Bananas Quantity
Cobb-Douglas Preferences] Asad lives in a world with two goods (N=2), apples and bananas. He has a Cobb-Douglas utility function over these goods U(a, b) = a 0.7 b 0.3 . Asad has an income I = 200, and faces prices pa = 2, pb = 1 (a) We know that if Asad is optimizing (and consumes a bundle that contains both apples and bananas), that the slope of the budget constraint should be equal to his MRS. Use this and his budget constraint to solve for his optimal bundle. (b) Suppose the price of apples rises to 4, and the price of bananas rises to 3. What is his new optimal consumption bundle? (c) Suppose Asad instead had a utility function given by U(a, b) = a 1.4 b 0.6 + 1. Given the same prices and income as in part (b), what is his optimal bundle?
8. Fabian consumes X and Y and the following utility function represents his utility: U = 2XY a. With a utility function of U = 2XY, Fabian's MU, = 2Y and his MU, = 2x ,where MU is marginal utility. Write an equation for Fabian's marginal rate of substitution (MRS). b. Suppose Fabian's income is $120 and Px = S6 and Py-$2, where Px is the price of X and Py is the price of Y. Write an equation for Fabian's budget constraint. c. Write the equation that equates the slope of Fabian's budget constraint to the slope of Fabian's indifference curve: d. If Fabian is spending all of his income, how much X and how much Y will he choose? Use the equations you wrote in part's b and c to answer this question. e. What will Fabian's utility be with this combination of X and Y? f. Now suppose the price of X increases to P.=10. Write the equation that equates the slope of Fabian's budget constraint to the slope of Fabian's indifference curve. How will this change the optimal combination of X and Y? What…
10 Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is measured on the vertical axis while food is measured on the horizontal one. Derive Jason's Marginal Rate of Substitution. Does his Marginal Rate of Substitution stay constant along one of his indifference curves? Explain your answer clearly