2a) Sompa's utility function for strawberries and grapes is given by U (S, G)=10s?G'. Where S represents strawberries and G represents grapes.i.Write down Sompa's budget constraint.ii.What combination of strawberries and grapes maximises Sompa'sutility if her income is GHC200, the price of strawberries isGHC 5per unit and the price of grapes is GHC 10 per unit?ii. What is Sompa's total utility (satisfaction)?iv. If the price of strawberries increases to GHC15 per unit and the priceof grapes and Sompa's income remain the same, discuss brieflywhat Sompa will have to do to maximize her satisfaction.b) Supposing strawberries was a giffen good, derive the demand curve forstrawberries with this increase in price.c) Explain the notion that "on the basis of price changes goods can be classifiedinto normal and giffen, and on the basis of income changes, goods can beclassified into normal and inferior".

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2a) Sompa's utility function for strawberries and grapes is given by U (S, G) =10S?G. Where S represents strawberries and G represents grapes. i. Write down Sompa's budget constraint. ii. What combination of strawberries and grapes maximises Sompa's utility if her income is GHC200, the price of strawberries is GHC 5per unit and the price of grapes is GHC 10 per unit? What is Sompa's total utility (satisfaction)? iv. If the price of strawberries increases to GH¢15 per unit and the price of grapes and Sompa's income remain the same, discuss briefly what Sompa will have to do to maximize her satisfaction. b) Supposing strawberries was a giffen good, derive the demand curve for iii. strawberries with this increase in price. c) Explain the notion that "on the basis of price changes goods can be classified into normal and giffen, and on the basis of income changes, goods can be classified into normal and inferior".

2a) Sompa's utility function for strawberries and grapes is given by U (S, G) =10S?G. Where S represents strawberries and G represents grapes. i. Write down Sompa's budget constraint. ii. What combination of strawberries and grapes maximises Sompa's utility if her income is GHC200, the price of strawberries is GHC 5per unit and the price of grapes is GHC 10 per unit? What is Sompa's total utility (satisfaction)? iv. If the price of strawberries increases to GH¢15 per unit and the price of grapes and Sompa's income remain the same, discuss briefly what Sompa will have to do to maximize her satisfaction. b) Supposing strawberries was a giffen good, derive the demand curve for iii. strawberries with this increase in price. c) Explain the notion that "on the basis of price changes goods can be classified into normal and giffen, and on the basis of income changes, goods can be classified into normal and inferior".

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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