11) An individual consumes only two goods, X and Y. Which of the following expressionsrepresents the utility-maximizing market basket?A) The slope of the utility function is zero.B) Px/Py = money income.C) The slope of the indifference curve = moneyD) The slope of the indifference curve= Px/Py.E) all of the aboveincome.

A consumer becomes indifferent when two items are combined because they both provide the same level…

Answered: 11) An individual consumes only two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. The BC shifts to the right (up).
QUESTION 1 Consider the following data from the table about a consumer. You have $16 to spend on dessert Price of Ice Cream = $2 per scoop Price of Cake: $4 per slice What is: A. The marginal utility adjusted for price for a quantity of 4 ice cream? B. What is the total utility of 5 slices of cake? C. What will be the optimal consumption bundle in this example _ Cake _Ice Cream QUESTION 1 1. Consider the following data from the table about a consumer. You have $16 to spend on dessert Price of Ice Cream =$2 per scoop Price of Cake: $4 per slice Quantity of TU Ice MU Ice MU/P Quantity Ice Cream Cream Cream TU MU MU/P of cake Cake Cake 1 4 1 10 2 3 2 8 3 2 3 6 4 1 4 4 5 0 5 2 The amount of total utility you'd enjoy at that level of consumption What is: A. The marginal utility adjusted for price for a quantity of 4 ice cream? B. What is the total utility of 5 slices of cake? C. What will be the optimal consumption bundle in this example Cream Cake
2)Ben is choosing between cookies and soda. Denote the marginal utility of cookies is MUc, and the marginal utility of soda is MUs. Which of the following relationship is true regarding the marginal utility of substitution (MŘS) of cookie in terms of soda? A) MRS= MUc B) MRS = MUS C) MRS = MUS / MUC D) MRS = MUc / MUs
Suppose a consumer's utility function is U(x₁,x₂)=x₁x₂. The price of Good 1 is 1, the price of Good 2 is 2, and his income is 40. 1st Question 3 On a graph, use blue ink to draw the consumer's budget line. (Use a ruler and try to make this line accurate.) Plot a few points on the indifference curve that gives him a utility of 150 and sketch this curve with red ink. Now plot a few points on the indifference curve that gives him a utility of 300 and sketch this curve with black ink or pencil.
Please help awnsering the following question. Thank you
8
QUESTION 1 For the utility function U = Qx0.50Qy(1-0.50) and the budget 122 = 8Qx + 14Qy find the CHANGE in optimal consumption of Y if the price of Xincreases by a factor of 1.7. Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 1.2, 1.14 = 1.1).
A consumer has an annual budget constraint for two goods: “housing sq. ft." and "$ for everything else". Draw the budget constraint for this consumer if income (v) = $50,000 and price per sq. ft. of housing, ph, is S200. Please be sure to fully label your graph (i.e., slope, intercept, etc.). Note: plot "housing sq. ft." on the x-axis. How would this consumer's budget line change if she received a $5,000 raise and the price of housing increased to $250? Include a graph with your answer. How did the economic rate of substitution (ERS) between housing and $ for everything else change when pa changed? Please interpret the ERS both before and after the price change.
The income effect of an increase in the price of a normal good that a consumer buys on a regular basis will be ___________ and the substitution effect will be _________.a) positive; negativeb) negative; negativec) negative; positived) positive; positivee) One cannot tell.
Sally consumes two goods, X and Y. Her utility function is given by the expression U = 2XY3. The current market price for X is $20, while the market price for Y is $10. Sally's current income is $500. a. Write the equation for Sally's budget constraint. What is the slope of her budget line? b. Determine the X,Y combination which maximizes Sally's utility, given her budget constraint.
solve d,e,f please Thank you
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