2 Benny has utility function U (x, y) = 2(/x+ /9)´ over goods x and y. Then if he has 400 units of good x and 100 units of good y, he will be willing to give up at most units of y in exchange for one more unit of x. O more than 4 0.5 O 1 O 2 O 3 O 4 O 0.25 4.

2 Benny has utility function U (x, y) = 2(/x+ /9)´ over goods x and y. Then if he has 400 units of good x and 100 units of good y, he will be willing to give up at most units of y in exchange for one more unit of x. O more than 4 0.5 O 1 O 2 O 3 O 4 O 0.25 4.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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

Benny has utility function U (x, y) = 2(VT + 7) over goods
x and y. Then if he has 400 units of good x and 100 units of good
y, he will be willing to give up at most
units of y in exchange
for one more unit of x.
more than 4
0.5
O 1
O 2
O 4
4.
0.25
3.

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Let the following table represents the total utility of a given consumer, in the cardinal utility approach. Q 1 2 3 4 5 6 7 TUX 8 14 18 20 20 18 16 TUY 6 10 13 15 16 16 14 MUX MUY MUX/PX MUY/PY Calculate the MUX and MUY and fill the table in the 4th and 5th rows. If the two products (X&Y) are free goods how many of X and Y should the consumer take to maximize utility? What is the maximum utility of X and Y if they are free? Let now price of X is 4 birr per unit and price of Y is 2 birr per unit. Calculate MUX/PX and MUY/PY and fill the 6th and 7th row. Assuming the consumer has any amount of money (enough budget) how many of X and Y should the consumer buy, to maximize utility? What is the total utility of X and Y? Let now price of X is 4 birr per unit and price of Y is 2 birr per unit and budget of the consumer for consumption of X and Y is 20 birr. Given budget constraint how many of X and Y should the consumer buy to maximize utility?
4please answer part a and b of quesrion #1
When goods are complements, there is a direct relationship between the price of one and the demand for the other. O 1) True O 2) False
For part b, is the utility received just the MU/P of 5 books and 1 pizza added up?
Q35
18
A date with Alex costs you $100 and gives you an additional 1000 units of utility. A date with Kelly costs you $200 and an additional 4,000 units of utility. Based only on the information you have, using the theory of rational choice, you most likely would: O be indifferent between the two dates O go on a date with Alex because the marginal utility per dollar is the greater of the two O go on a date with Kelly O go on a date with Alex